Profit Margin = (Profit ÷ Revenue) × 100
Profit = Revenue – Costs
Revenue = Total sales income
Costs = All expenses related to the sale
Gross Profit Margin = ((Revenue – Cost of Goods Sold) ÷ Revenue) × 100
Operating Profit Margin = ((Revenue – Operating Expenses) ÷ Revenue) × 100
Net Profit Margin = ((Revenue – Total Expenses) ÷ Revenue) × 100
Convert the result to a percentage by multiplying by 100
Example: If revenue is 1,000 and profit is 200, profit margin = (200 ÷ 1,000) × 100 = 20%