📊 Profit Margin Calculator

Profit Margin and Markup Calculator

The Profit Margin Calculator helps businesses and entrepreneurs understand their profitability by computing key financial metrics from cost and selling prices. Knowing your profit margin and markup is essential for pricing strategy, financial reporting, and business planning.

Enter your cost price and selling price to instantly see your gross profit amount, profit margin percentage, and markup percentage. These metrics help you evaluate whether your pricing is sustainable and competitive in your market.

Understanding the difference between margin and markup is critical for accurate pricing. Many businesses confuse the two, which can lead to pricing errors that significantly impact profitability. This calculator clearly distinguishes between both metrics.

Frequently Asked Questions

What is the difference between margin and markup?

Margin is the percentage of the selling price that is profit: (Selling Price - Cost) / Selling Price × 100. Markup is the percentage added to cost to get the selling price: (Selling Price - Cost) / Cost × 100.

What is a good profit margin?

A good profit margin varies by industry. Retail typically sees 5-10% margins, software can have 70%+ margins, and restaurants usually operate on 3-5% margins. Service businesses generally have higher margins than product-based businesses.

How do I calculate gross profit?

Gross profit is the selling price minus the cost of goods sold (COGS). It represents the money remaining after covering the direct costs of producing or purchasing the goods you sell.