This tool will work as gross margin calculator or a profit margin calculator.
Cogs margin how to#
Luckily, it's likely that you already know what you need and how to treat this data. To us, what's more important is what these terms mean to most people, and for this simple calculation the differences don't really matter. In this calculator, we are using these terms interchangeably and forgive us if they're not in line with some definitions. For example, costs may or may not include expenses other than COGS - usually, they don't. If you are starting your own business, feel free to visit our collection of start up calculators to get you on your feet.Īll the terms (margin, profit margin, gross margin, gross profit margin) are a bit blurry and everyone uses them in slightly different contexts. If you are running a business, you may find our VAT calculator, sales tax calculator and sales commission calculator convenient, too. We have a few calculators that are similar in nature - you can check out our margin with VAT (or sales tax), margin with a discount or the very similar markup calculator. Keep reading to find out how to find your profit margin and what is the gross margin formula. High profit margins mean there's a lot of room for errors and bad luck. In general, your profit margin determines how healthy your company is - with low margins you're dancing on thin ice and any change for the worse may result in big trouble. That's not all though, you can calculate any of the main variables in the sales process - cost of goods sold (how much you paid for the stuff that you sell), profit margin, revenue (how much you sell it for) and profit - from any of the other values. This margin calculator will be your best friend if you want to find out an item's revenue, assuming you know its cost and your desired profit margin percentage.
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