How to calculate margin formula in Excel

 Microsoft Excel is a basic software for numeric data calculation the data is stored in rows and columns. When we work on business analysis and calculations, we need to find margins for the company. It’s a big task for data analysts to find profit margins in multiple methods.

In this tutorial we will learn how to calculate the profit margin formula in Excel.  Microsoft Excel does not have  any special calculation formula but we can use some mathematical formulae to calculate profit margin.

Profit margin can be calculated by different methods. Some basic method for the calculation of profit margin are given below.

Method 1 – Gross Profit Margin

It is a basic statistic formula by which we can simply calculate gross profit margins. We should have total revenue and cost of goods.

The formula is 

Gross Profit Margin =   Total Revenue – Cost  / Total Revenue

Profit can be calculated by simply by subtracting the cost value from total sales .

The gross profit can be calculated by subtracting the revenue from cost and dividing it on total revenue. 

Step 1 – Select the cell and apply formula

• Assume that a business has total revenue is $ 5000 and cost is $ 1000 and the profit would be obtained by subtracting it.
• Divide the result with revenue.
• Click on the percentage button in the Home tab in the numbers cluster.
• As soon as you press the percentage key it will gross profit in percentage.

The formula below calculates the number above the fraction line. This is called the gross profit.

Method 2 – Net profit margins

The net profit margin also includes non-operating expenses such as interest and taxes.

The formula is 

Net Profit Margin = Total Revenue – Cost- Expenses- Interest – Taxes / Total Revenue

Step 1 – Select the income and apply formula

• Select the cell where you wish to calculate income.
• Sum all the liabilities, payables and expenses from total revenue. Income will be found.
• Divide it on total revenue . The net profit will be shown in decimal.
• Click on the percentage button in the Home tab in the numbers cluster.
• As soon as you press the percentage key it will show Net profit margins in percentage will be shown.

Hence , we have calculated the margins of different types in Excel by the above shown animations.