# How to calculate profit margin in Excel

Return to Excel Formulas ListProfit Margin Calculator in Excel & Google SheetsDownload Example WorkbookDownload the example workbookIn this ArticleProfit MarginCalculate Profit

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## Profit Margin Calculator in Excel & Google SheetsDownload Example Workbook

Download the example workbook

In this Article

- Profit Margin
- Calculate Profit Margin from the table
- Step 1
- Step 2
- Step 3
- Step 4
- Calculate Percentage Profit Margin in Google Sheets

In this tutorial, we will learn how to calculate the percentage profit margin in Excel & Google Sheets.

## Profit Margin

The profit margin indicates how much a company is making in profit from a sale. It represents what percentage of sales has turned into profit.

## Calculate Profit Margin from the table

Lets say that you a list of data with Sale Price and Actual Cost of the Products. Then the profit margin will be calculated by subtracting the actual cost from the sale price and then dividing it by the sale price, like this:1=(B3-C3)/B3

The formula can easily be understood by breaking it down into the following 4 simple steps:

**Step 1**

First of all, we need to prepare the data for the calculation of the profit margin. Here, in the above table, weve put some values that we are going to use to find the profit margin between the sale_price and actual_cost.

**Step 2**

After preparing the data, well calculate the profit for the values. The profit is simply calculated by subtracting the column C values from column B values.1=B3-C3

The difference we calculated can have a positive value or negative value, meaning the change in

value can be positive and negative.

**Step 3**

Now we simply divide the profit value or change in value (column D) with the sale_price (column B). This will give us the result in number format1=D3/B3

**Step 4**

The result we get in step 3 is in number format. We need the values in the percentage form. So, well change the number format of the entire column E. To do so,

- First, well select the cells from E3 to E10.
- Then on the Home tab, in the Number group, click the
**%**icon for changing the number format to Percent Style.

After this, well get the profit margin in percentage between the two numbers.

## Calculate Percentage Profit Margin in Google Sheets

The formula to calculate percentage profit margin works exactly the same in Google Sheets as in Excel: