How to Calculate Profit Margin Percentage in Excel

Calculate gross and net profit margins for a coffee roaster’s quarterly P&L and the margin for the whole year.

You will learn to

• Calculate gross margin for a quarter
• Calculate net margin after all costs
• Calculate a full-year margin from quarterly totals

How it works

Profit margin shows how many cents of each sales dollar you keep. Gross margin = (revenue − cost of goods sold) ÷ revenue; net margin = (revenue − all costs) ÷ revenue, including operating expenses, interest and tax. Format the result as a percentage.

For a full-year margin, never average the quarterly percentages — quarters with more revenue should count more. Add up the year’s revenue and costs first, then divide: =(SUM(B2:E2)-SUM(B3:E5))/SUM(B2:E2).

=(B2-B3)/B2