Profit Margin Calculator
Calculate profit margin, markup, and gross profit. Essential for pricing products, analyzing profitability, and business planning.
Enter your values to calculate profit margin.
How It Works
Profit Margin = (Revenue - Cost) ÷ Revenue × 100. This shows what percentage of sales is profit.
Markup = (Revenue - Cost) ÷ Cost × 100. This shows how much you added to cost to get the selling price.
Frequently Asked Questions
What's the difference between margin and markup?
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. A 50% markup results in a 33% margin. They're related but different metrics.
What's a good profit margin?
It varies by industry. Retail: 2-5%. Software: 70-90%. Restaurants: 3-9%. Manufacturing: 5-10%. Compare to your industry benchmarks, not general averages.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). For example, 50% markup = 0.50 ÷ 1.50 = 33.3% margin. Conversely, Markup = Margin ÷ (1 - Margin).