Margin Calculator
Calculate profit margin from cost and selling price. Understand your business profitability.
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Understanding Profit Margin
Profit margin shows what percentage of your selling price is actual profit. The formula is: Margin % = ((Selling Price - Cost) ÷ Selling Price) × 100.
Types of Profit Margin
- Gross Margin: Revenue minus cost of goods sold, divided by revenue
- Operating Margin: Operating income divided by revenue
- Net Margin: Net profit divided by revenue (after all expenses)
Converting Between Margin and Markup
To convert markup to margin: Margin = Markup ÷ (1 + Markup). To convert margin to markup: Markup = Margin ÷ (1 - Margin).
Frequently Asked Questions
Profit margin is the percentage of revenue that remains as profit after costs. Gross margin = (Revenue - Cost) ÷ Revenue × 100. A 40% margin means 40 cents of every dollar is profit.