How to calculate profit margin?
- Find out your COGS (cost of goods sold). For example
- Find out your revenue (how much you sell these goods for, for example
- Calculate the gross profit by subtracting the cost from the revenue.
£50 - £30 = £20
- Divide gross profit by revenue:
£20 / £50 = 0.4.
- Express it as percentages:
0.4 * 100 = 40%.
- This is how you calculate profit margin. Margin % = (Retail – Cost) / Retail * 100)