ThisCalculator

Business

Calculating Profit Margin

Updated · Standard formula, shown below

Profit margin 28.00 %
Profit
70.00 $
Result
Markup
38.89 %
Result
Selling price (revenue)
250 $
You entered

This calculator works out the profit margin on a sale. Enter the selling price (revenue) and the cost, and you get the profit, the margin as a share of the price and the markup as a share of the cost.

Formula

Profit = revenue − cost. Margin = profit ÷ revenue × 100. Markup = profit ÷ cost × 100.

  • rev: selling price or revenue (any currency)
  • cost: cost of the goods sold, same currency

Worked Example

An item sells for 250 and costs 180.

  1. Profit = 250 − 180 = 70.00
  2. Margin = 70 ÷ 250 × 100 = 28.00%
  3. Markup = 70 ÷ 180 × 100 = 38.89%

Limits and common mistakes

  • Margin and markup are not the same: a 50% markup is only a 33.3% margin.
  • Which costs to include changes the answer: cost of goods gives gross margin; subtracting all expenses gives net margin.
  • Margin can never reach 100%; markup can be any size.
  • To find the price for a target margin, use price = cost ÷ (1 − margin ÷ 100): a 28% margin on 180 gives 180 ÷ 0.72 = 250.
  • Use the same tax treatment for price and cost, either both with or both without sales tax.
Formula used
in rev | Selling price (revenue) | $ | 250 | 0
in cost | Cost | $ | 180 | 0
out mg | Profit margin | % | (rev - cost) / rev * 100 | 2
out pr | Profit | $ | rev - cost | 2
out mk | Markup | % | pr / cost * 100 | 2

Each line is one input (in, sel, list) or one result (out: label, unit, formula, decimals). How the calculators work

Method: the standard formula for this calculation, rounded as each result states. See how the calculators work or report an error.