# Profit Margin Ratio Calculator

Profit margin ratio is the very useful for measuring the revenue generated with each dollar of sales. The profit margin ratio method is widely used by many investors to measure the company's ability to convert every sale into net income.

Formula to calculate profit margin ratio is given by:

Let us consider a simple example,

Company Alpha has a net income of \$600 and \$1000 in net sales. Calculate it's profit margin ratio.

Solution:

Given:

Net Income = \$600

Net Sales = \$1000

Formula, Profit Margin Ratio = Net Income / Net Sales

= 600/1000

= 0.6

Therefore, the profit margin ratio of company Alpha is 0.6 or 60%

Similarly, enter both of the parameters in the below online profit margin ratio calculator and then click calculate to find the answer.

 Net Income: \$ Net Sales: \$ Profit Margin Ratio: OR

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