Insert the information in the form and the calculator will determine the sales margin.


What is the sales margin?


Sales margin is a measurment of the amount of profit you make on the sale of a product or service after all costs related to the item are accounted for. The higher your sales margin the higher your potential for profit on that product or service.


How to calculate sales margin?


To calculate sales margin you should use the following formula:
sales margin = (revenue - cost of goods sold) / revenue


example: A product has a revenue of $40 and the cost of producing this product is $15, calculate the sales margin?


Using the sales margin formula the answer will be:
sales margin = (revenue - const of goods sold) / revenue
sales margin = ($40 - $15) / $40
sales margin = 0.625 or 62.5%


Why use sales margin?


Businesses use sales margins because the higher their sales margin, the more profit they make.


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