Profit Margin Calculator
Calculate profit margin, markup and profit from cost and revenue.
Input
Profit margin
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Profit
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Markup
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Cost ratio
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Formula & explanation
Profit Margin = (Revenue − Cost) / Revenue × 100
The profit margin shows the percentage of revenue that is profit after costs. A higher margin means a more profitable product or business.
Markup is different: it measures profit as a percentage of cost, so the same sale always shows a higher markup than margin.
Example
Cost (USD)$60.00
Selling price / Revenue (USD)$100.00
Profit (Revenue − Cost)$40.00
Profit margin40.00%
Markup (Profit / Cost)66.67%
What is profit margin?
The share of revenue that remains as profit after subtracting the cost.
What is the difference between profit margin and markup?
Margin uses revenue as the base; markup uses cost. A 50% markup equals a 33.3% margin.
Can the margin be negative?
Yes. If cost is higher than revenue, the result is a loss and the margin is negative.