Profit Margin Calculator
Measure business pricing efficiency. Input cost of goods (COGS) and selling price to find your gross profit, gross margin, and cost markup in real-time.
Parameters
Results Summary
This calculator determines the results based on the following standard financial formula for Profit Margin & Markup:
Variables Glossary
- Profit
- Gross Profit (Revenue - Cost)
- Margin %
- Gross Profit Margin (Profit / Revenue × 100)
- Markup %
- Markup rate on product cost (Profit / Cost × 100)
- Cost
- Cost of Goods Sold (COGS)
- Revenue
- Selling Price / Total Sales value
Calculates the ratio of net profit generated from sales to the total selling price, representing profitability per dollar of revenue.
What is the difference between Margin and Markup?
Margin is the profit percentage calculated relative to the *selling price* (Revenue). Markup is the profit percentage calculated relative to the *cost price* (COGS). For example, if cost is $60 and selling price is $100, the margin is 40% but the markup is 66.7%.
Why is tracking profit margin critical for businesses?
Profit margin indicates how efficiently a business is pricing its products and controlling direct production costs. A higher profit margin suggests a more secure buffer to absorb general operational and overhead costs.