If you want to determine an item's income, this margin calculator will be your greatest friend, provided you are aware of the cost and the required profit margin %. That's not all, however; any of the other numbers may be used to compute any of the key factors in the sales process, including cost of goods sold (how much you spent for the items you sell), profit margin, revenue, and profit. Your company's health is often determined by your profit margin; if your margins are low, you are operating on thin ice and any adverse changes might spell serious disaster. High-profit margins provide a lot of space for mistakes and unlucky circumstances. Learn how to calculate your profit margin and what the gross margin calculation is in the following paragraphs.