In this article, we will show and discuss how the margin formula in Excel works. Here, we will go through some easy formulas to do the task smoothly.

The margin formula in Excel refers to the calculation of the profit margin. The margin formula is beneficial for many reasons: profitability analysis, financial planning, pricing decisions, performance evaluation, benchmarking, and comparison.

So letâ€™s go through the article to thoroughly understand the topic.

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## How to Calculate Gross Profit Margin in Excel

In this section, we will calculate the gross profit margin.

The formula for calculating gross profit margin is:

**G****ross profit margin** **= (Revenue âˆ’ Cost of Goods Sold) / Revenue**

- We will type the following formula in cell
**E5**.

`=(C5-D5)/C5`

- After that, press
**ENTER**. - Then, to add a percentage, we use the shortcut key
**CTRL+SHIFT+%**.

Thus, you can see the result in cell **E5**.

- Then, we will drag down the formula with the
**Fill handle**tool.

Therefore, you can see the complete Gross Profit Margin column.

## How to Find Out Operating Profit Margin in Excel

Here, we will find out the operating profit margin.

The formula for calculating the operating profit margin is:

**Operating profit margin** **= (Revenue âˆ’ Cost of Goods Sold-Operational Cost) / Revenue**

- We will type the following formula in cell
**F5**.

`=(C5-D5-E5)/C5`

- After that, press
**ENTER**. - Then, to add a percentage, we use the shortcut key
**CTRL+SHIFT+%**.

Thus, you can see the result in cell **F5**.

- Then, we will drag down the formula with the
**Fill handle**tool.

Therefore, you can see the complete** Operating Profit Margin** column.

## How to Calculate Net Profit Margin in Excel

In this section, we will describe how you calculate the net profit margin.

The formula for calculating operating net profit margin:

**Net profit margin** **= Net Income / Total Revenue**

- We will type the following formula in cell
**E5**.

`=D5/C5`

- After that, press
**ENTER**. - Then, to add a percentage, we use the shortcut key
**CTRL+SHIFT+%**.

Thus, you can see the result in cell **E5**.

- Then, we will drag down the formula with the
**Fill handle**tool.

Therefore, you can see the complete** Net Profit Margin** column.

## Conclusion

This article discusses the Excel margin formula and various related scenarios. This article explains the topic in detail, and we believe you thoroughly understand the topic.

Here, we present how to calculate gross, operating, and net profit margins. Thank you for reading this article. We hope you find this article beneficial. If you have any queries or suggestions, please let us know in the comment section.

## Frequently Asked Questions

**I. How Do I Calculate a 20% Margin in Excel?**

To calculate a 20% margin in Excel, you can use the following formula:

**=Cost / (1 â€“ Margin)**

- In cell
**A1**, enter the cost or price of the item. - In cell
**B1**, enter the formula**=A1 / (1 â€“ 0.2)**.

Change **0.2 **to any other decimal value if you want to calculate a different margin percentage.

- Press
**ENTER**to get the result.

The value in cell **B1 **will be the price that includes a **20% **margin.

**II. What Is 20% Markup to Margin?**

A 20% markup to margin means adding 20% of the cost to the cost itself.

For example, letâ€™s assume the cost of a product is $100. After applying a 20% markup, the markup would be $20 (20% of $100), resulting in a selling price of $120 ($100 + $20).

**III. What Is a 20% Net Margin?**

A 20% net margin means that for every dollar of revenue generated by a company, 20 cents (or 20%) is retained as net profit. The remaining 80 cents (or 80%) is used to cover various expenses. A higher net margin indicates a more profitable company, as it suggests that the business is able to generate a significant profit relative to its revenue.

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