Profit Margin

The percentage of revenue that remains as profit after costs are deducted. Gross Margin = (Revenue − COGS) ÷ Revenue × 100. Net Margin includes all expenses.

Margin tells you how profitable your business truly is. High revenue with low margins means you are working hard for very little. Understanding margin is essential for pricing and scaling decisions.

You sell a product for £100. It costs you £40 to make (COGS). Your gross margin is 60%. After other expenses, your net margin might be 20%.