how to calculate profit margin
How to Calculate Profit Margin for Business
Profit margin shows how much profit remains from each unit of sales revenue.
Bangladesh-focused guide with practical calculation workflow.
Step-by-Step Explanation
- Find revenue and cost
- Calculate gross or net profit
- Divide profit by revenue
Formula Used
- Profit margin % = (profit / revenue) × 100
Example Calculation
- If revenue is BDT 200,000 and profit is BDT 50,000, margin is 25%.
Common Mistakes
- Using markup formula instead of margin
- Ignoring indirect costs for net margin
FAQ
- What is healthy margin? Varies by industry.
- Should I use gross or net margin? Use both for better decision-making.
Related Calculators
- Open: /calculators/profit-margin-calculator
- Open: /calculators/gross-profit-calculator
- Open: /calculators/net-profit-calculator