Profit Margin Calculator
Calculate your profit margin percentage from revenue and cost — instantly see profit, margin, and markup.
Profit Margin
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Revenue
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Cost
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Profit
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Markup
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How to Use the Profit Margin Calculator
- Enter your revenue: The total selling price or revenue amount.
- Enter your cost: The total cost of goods or services.
- View your results: Profit margin, profit amount, and markup are calculated instantly.
Profit Margin Formula
Profit margin is calculated as:
Profit Margin (%) = ((Revenue - Cost) / Revenue) × 100
Profit amount:
Profit = Revenue - Cost
Markup percentage:
Markup (%) = ((Revenue - Cost) / Cost) × 100
Profit Margin Examples
| Revenue | Cost | Profit | Margin | Markup |
|---|---|---|---|---|
| $100 | $60 | $40 | 40% | 66.7% |
| $100 | $75 | $25 | 25% | 33.3% |
| $200 | $120 | $80 | 40% | 66.7% |
| $50 | $30 | $20 | 40% | 66.7% |
| $500 | $450 | $50 | 10% | 11.1% |
Margin vs. Markup
Profit margin and markup are related but different measures. Margin is the percentage of revenue that is profit, while markup is the percentage added to cost to arrive at the selling price. A 50% markup results in a 33.3% margin, not a 50% margin.
For example, if you buy an item for $60 and sell it for $100, your profit is $40. The margin is 40% (40/100), while the markup is 66.7% (40/60).
Frequently Asked Questions
What is a good profit margin?
A good profit margin varies by industry. Retail typically sees 2-5%, software companies 20-40%, and service businesses 15-25%. Compare your margin to industry benchmarks for a meaningful assessment.
What is the difference between margin and markup?
Margin is profit as a percentage of revenue (selling price), while markup is profit as a percentage of cost. A 50% margin means half of revenue is profit. A 50% markup means you added half the cost as profit.
How do I increase my profit margin?
You can increase profit margin by raising prices, reducing costs, improving operational efficiency, focusing on higher-margin products, or reducing discounts. Analyze your cost structure to find the best opportunities.