Profit Margin Calculator

Profit margin tells you what percentage of your revenue is profit. Markup tells you how much above your cost you are charging. This calculator computes both from your revenue and cost figures - essential for pricing products and analysing business performance.

₹50,000
₹
₹30,000
₹
Profit margin
40%
Profit as a percentage of revenue
Gross profit
₹20,000
Markup
66.67%

How to calculate profit margin

Gross profit is revenue minus cost. Margin divides gross profit by revenue (what the customer pays). Markup divides gross profit by cost (what you paid). They sound similar but have very different values.

Formula
Gross profit = Revenue - Cost | Margin = (Profit / Revenue) x 100 | Markup = (Profit / Cost) x 100

Example. Revenue of 50,000 and cost of 30,000 gives a gross profit of 20,000, a 40% margin and a 66.7% markup.

Frequently asked questions

What is the difference between margin and markup?

Margin is profit divided by revenue. Markup is profit divided by cost. A 50% markup produces only a 33.3% margin, so they are very different numbers for the same transaction.

What is a good profit margin?

It varies by industry. Retail typically runs 20-50% gross margin, SaaS software can exceed 70%, manufacturing often 30-50%. Compare against industry benchmarks rather than an absolute target.

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