The most powerful free weighted profit calculator. Compute the true blended profit margin across multiple products, services, or business segments by weighting each margin by its revenue contribution. See live interactive charts and step-by-step breakdowns.
Enter profit margins and revenues to find your true weighted profitability across all segments.
A weighted profit margin is the blended average of profit margins across multiple products or business segments, where each margin is weighted by its revenue contribution. Unlike a simple average of margins, it reflects the true overall profitability of your business by giving more influence to higher-revenue segments.
A simple average adds all margins and divides by count. A weighted margin multiplies each margin by its revenue, sums those products, then divides by total revenue. When revenue varies dramatically across products, the weighted margin is the only accurate measure of overall profitability.
Type each product or segment's profit margin percentage into the 'Margin' column. Use gross margin, operating margin, or net margin — just be consistent.
Enter the revenue generated by each product or segment. Higher-revenue items will have greater influence on the blended margin.
The calculator computes your true weighted profit margin instantly. See the blended margin, total profit, revenue breakdown, and interactive charts update in real time.
The weighted profit formula: multiply each margin by its revenue, sum those products, then divide by the total of all revenues. Mathematically: m̄ = Σ(mᵢ × rᵢ) / Σ(rᵢ).
Enter each product with its margin and revenue. For example: Software 72% ($500K), Hardware 15% ($1.2M), Services 45% ($300K).
72% × $500K = $360K · 15% × $1.2M = $180K · 45% × $300K = $135K.
$360K + $180K + $135K = $675K (total profit).
$500K + $1.2M + $300K = $2.0M.
$675K ÷ $2.0M = 33.75%. Your true blended profit margin is 33.75%.
A 90% margin on $10K revenue and a 5% margin on $1M revenue have a simple average of 47.5%, but the weighted margin is only 5.8%. Revenue weighting is essential.
Gross margin excludes operating costs; net margin includes everything. Mixing them across segments produces meaningless results. Use consistent margin types.
Segments with negative margins (losses) reduce your blended margin. Don't exclude them — they reflect real business performance and impact overall profitability.
Multiply each segment's margin by its revenue. Sum all products. Sum all revenues. Divide. This calculator automates the process for accurate blended margins.
A company sells software, hardware, and services at different margins. Compute the true overall profitability.
Despite software having the highest margin, hardware's $1.2M revenue gives it significant weight, pulling the blended margin toward 15%.
A retailer has electronics, clothing, and grocery departments with different margins and revenues.
Grocery generates the most revenue but has thin margins. The weighted margin reveals the true profitability picture.
Determine which products contribute most to overall profitability and optimize your product mix for maximum margin.
Calculate blended profit margins across divisions for investor reports, board presentations, and strategic planning.
Evaluate how pricing changes on high-revenue products affect your overall blended margin to make smarter pricing decisions.
Assess acquisition targets by computing their revenue-weighted margin to understand true profitability beyond headline numbers.
Revenue figures must be positive. The calculator requires positive revenue values. A revenue of zero means that segment has no influence on the blended margin.
Equal revenues = simple average margin. When every segment generates the same revenue, the weighted profit margin equals the simple average of all margins.
Blended margin falls between lowest and highest margins. No matter the revenue distribution, the blended margin will always fall between the lowest and highest individual margins.
Higher-revenue segments dominate the blended margin. The larger a segment's revenue relative to total, the more the blended margin reflects that segment's margin. A $10M product at 5% margin dominates over a $100K product at 90% margin.
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