Margin Calculator
Calculate the profit margin, markup, gross profit, and revenue of a product or service. Understand the difference between margin and markup to optimize your pricing strategy.
Profit Margin: 30%
| Gross Profit | $300.00 |
|---|---|
| Markup Percentage | 42.86% |
| Revenue | $1,000.00 |
| Cost | $700.00 |
Markup: 42.86%
| Profit Margin | 30% |
|---|---|
| Gross Profit | $300.00 |
| Selling Price | $1,000.00 |
| Cost | $700.00 |
About Margin Calculator
The Margin Calculator helps you determine the profit margin, markup percentage, gross profit, and revenue of a product or service. Understanding these metrics is crucial for setting prices, evaluating profitability, and making informed business decisions.
What is Profit Margin?
Profit margin is a financial metric that shows what percentage of revenue is profit. It's calculated as:
Profit Margin = (Revenue - Cost) / Revenue × 100%
A higher profit margin indicates a more profitable business, as it shows that a greater percentage of revenue is being converted to profit.
What is Markup?
Markup is the difference between the cost of a product and its selling price, expressed as a percentage of the cost. It's calculated as:
Markup = (Selling Price - Cost) / Cost × 100%
Markup is used to determine the selling price based on the desired profit percentage over cost.
Difference Between Margin and Markup
While both margin and markup measure profitability, they do so from different perspectives:
- Margin shows profit as a percentage of revenue
- Markup shows profit as a percentage of cost
For example, a 50% markup on a $100 cost results in a $150 selling price and a 33.33% profit margin.