Profit Margin Calculator
Analyze your business profitability with gross profit, profit margin, and markup. Enter cost and revenue – get instant insights.
📊 Business Parameters
COGS, materials, production, shipping
Sales income before any deductions
Profit Margin
Gross Profit
$25.00
Markup
33.33%
📈 Profit Margin & Business Health
Profit margin is one of the most important financial ratios. It measures how much out of every dollar of sales a company actually keeps in earnings. A higher margin means better control over costs relative to revenue.
🔗 Learn more: Wikipedia – Profit Margin | Investopedia Guide
🧮 Margin vs Markup – Critical Distinction
Margin = (Revenue – Cost) / Revenue → Markup = (Revenue – Cost) / Cost. Many confuse them – but a 25% margin equals a 33.3% markup. Use the right one for pricing: markup for setting selling price, margin for profitability analysis.
🧠 Financial Literacy Tips
- Know your breakeven point – fixed costs ÷ contribution margin per unit.
- Monitor margins regularly – small changes in cost or price can dramatically affect profit.
- Gross margin vs net margin – gross margin only includes cost of goods sold; net margin includes all operating expenses.
- Industry benchmarks – retail margins are typically 5‑20%, software 70‑85%, restaurants 3‑9%.
📊 Example Scenarios
✔ If a product costs $50 to make and sells for $100 → profit = $50, margin = 50%, markup = 100%.
✔ If revenue = $200, cost = $150 → profit = $50, margin = 25%, markup = 33.3%.