Question

Tom's business expenses are $45,000 per month. If his monthly revenue is $60,000, what is his monthly profit margin in percentage?

Answer 1

To calculate Tom's monthly profit margin in percentage, we first need to determine his monthly profit, which is found by subtracting his monthly expenses from his monthly revenue.

1. **Calculate Monthly Profit**:
\[
\text{Monthly Profit} = \text{Monthly Revenue} - \text{Monthly Expenses}
\]
\[
\text{Monthly Profit} = 60,000 - 45,000 = 15,000
\]

2. **Calculate Profit Margin Percentage**:
The profit margin percentage is calculated using the formula:
\[
\text{Profit Margin} \, (\%) = \left( \frac{\text{Monthly Profit}}{\text{Monthly Revenue}} \right) \times 100
\]
\[
\text{Profit Margin} \, (\%) = \left( \frac{15,000}{60,000} \right) \times 100
\]
\[
\text{Profit Margin} \, (\%) = 0.25 \times 100 = 25\%
\]

Thus, Tom's monthly profit margin is **25%**.