How to Calculate Profit margin in Excel

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What is Profit Margin?

Profit margin is an important figure for business because it tells the percentage of each profited sale. Profit margins are important when pricing products, pursuing financing and generating sales reports. If you create the spreadsheet and input the formula properly, Microsoft Excel will calculate profit margins. If you need to calculate a profit margin, you can easily do so with a simple formula that uses the sale price and the cost.

Knowing how to calculate your profit margin will help you take control of your business and ensure that each sale nets the profit you expect.

So now let’s See how to calculate Profit Margin.

Table with Sales Price and Profit margin

Step 1: Create a table same as like given picture. This table is showing Sale price in column A, Cost in column B, Profit in column C and Profit Margin in column D.

Formula to calculate profit

Step 2: Before we calculate profit margin, we need to calculate profit by input a formula in the cells of column C. the formula would be like this in cell C2:

=(A2-B2)

The formula should read “=(A2-B2)” to subtract the cost of the product from the sale price. The difference is your overall profit, in this example, the formula result would be $120.

Then press ENTER.

You will get the profit value in cell

Step 3: Now you will get the profit value in cell C2. Now do the same for another cell of column C. after that the table will be looked like above picture.

Formula for Profit Margin

Step 4: Now we will calculate the profit Margin in column D using this formula in cell D2:

=(C2/A2)*100

This formula will calculate the percentage value of Profit margin.

Then press ENTER.

Now do the same for another cell of column D. You will get all profit margin for each Sale.

Now you have successfully learned how to calculate Profit Margin!!