Margins Calculator
Calculate Gross Profit, Profit Margin, and Markup instantly.
Calculation Results
Gross Profit
$0.00
Profit Margin
0.00%
Markup
0.00%
Revenue
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Understanding Profit Margins
In business, the Gross Profit Margin is one of the most critical indicators of financial health. It represents the percentage of total sales revenue that a company retains after incurring the direct costs associated with producing or purchasing the goods it sells.
The Formula for Margin
Margin = ((Selling Price – Cost) / Selling Price) * 100
Margin vs. Markup: What's the difference?
While many use these terms interchangeably, they tell different stories:
- Margin is based on the Selling Price. It tells you how much of every dollar of sales is profit.
- Markup is based on the Cost. It tells you how much you added to the cost to reach your selling price.
Example Calculation
| Scenario | Cost | Price | Margin (%) |
|---|---|---|---|
| Retail Clothing | $20.00 | $50.00 | 60% |
| Consumer Electronics | $400.00 | $450.00 | 11.1% |
| Software SaaS | $5.00 | $50.00 | 90% |