Profit Margin Calculator
Understanding your profit margins is essential for business success. This calculator helps you determine gross profit margin, markup percentage, and net profit. Whether you are setting prices, evaluating products, or analyzing your business performance, get the numbers you need.
How We Calculate This
Gross Profit = Price - Cost. Margin = (Profit / Price) x 100. Markup = (Profit / Cost) x 100. Scenarios show different margin targets applied to your cost.
Frequently Asked Questions
What is 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 equals a 33% margin. Margin is always lower than markup for the same profit.
What is a good profit margin?
It varies by industry. Retail: 3-5%. Software: 70-90%. Restaurants: 3-9%. Manufacturing: 8-12%. Compare against industry benchmarks for your specific business type.
How do I calculate selling price from desired margin?
Price = Cost / (1 - Margin). For a 40% margin on a $60 cost: $60 / (1 - 0.40) = $60 / 0.60 = $100 selling price.
Why is my margin different from my markup?
They use different bases. Margin uses selling price as the base, markup uses cost. A $40 profit on $100 sale is 40% margin but 67% markup ($40/$60 cost).
Related Calculators
You might also find these calculators helpful: Margin Calculator, Break-Even Calculator, and Discount Calculator.