How this calculation works
Profit equals revenue less the entered costs. Profit margin is profit ÷ revenue × 100. The result is a net or gross margin depending on which costs you include.
A worked example
R100 000 sales less R70 000 costs gives R30 000 profit and a 30% margin.
Assumptions & limitations
- Use revenue and costs for the same period on a consistent VAT basis. Include all operating costs for a net operating margin, or cost of goods only for a gross margin. Income tax and financing items not entered are excluded.
