Profit Margin is the part of the revenue which you earn as a profit (always measured as a percentage). In this tutorial, we will calculate it in Google Sheets with a simple and quick formula.
To calculate it, you need to revenue and cost.
Write a Formula to Calculate the Profit Margin.
- First, enter starting parentheses, and refer to the cell where you have the revenue or enter it in a cell directly.
- After that, enter the minus operator and refer to the cell where you have cost or enter it directly into the cell.
- Now, close the parentheses and enter a divide operator (forward slash), and refer to the cell where you have revenue.
- In the change, the cell format changed from number to percentage. You can also use the keyboard shortcut Ctrl + Shift + % to change the format.
=(A2-B2)/A2And the generic formula is =(revenue-cost)/revenue
In this formula, we have deducted the cost from the revenue to get the profit amount. And then divide it by the revenue to get the percentage of it which is the profit margin.
If you don’t want to apply the percentage format and still want to see the result in the percentage, you can use a formula like the one below:
=((A2-B2)/A2)*100
=((revenue-cost)/revenue)*100