In Excel, if you want to calculate the gross margin (ratio of the profit margin), you need a formula. And in this tutorial, we will learn to write it.
Write the Formula to Get the Gross Profit (Margin and Ratio)
Below are the steps to write this formula:
- First, enter the equal to (=) operator in a cell and type a starting parentheses.
- After that, refer to cell B1 where you have the Revenue.
- Next, enter the minus operator, and refer to the Cost and Expenses (B2).
- Ultimately, enter the divide operator and refer to the revenue cell again. And hit enter to get the result.
The moment you hit enter, it returns the gross profit percentage in the result.
=(B1-B2)/B1 =(Revenue – Cost) / Revenue
You can also calculate the gross profit in one cell and the margin in another cell.
In the below example, we have separated profit and profit margin percentages in two different cells.
=Revenue – Cost =B1-B2
Gross Profit Margin
= Gross Profit / Revenue =B3/B1