Business
Profit margin calculator
Find profit, margin, and markup from a cost and a revenue. Or start from a cost and a target margin and solve the revenue. Margin and markup use different bases, so the percents are not interchangeable.
- Cost$60.00
- Profit$40.00
What this means
- Profit is $40.00. Margin is 40.00% of revenue. Markup is 66.67% of cost.
- Margin and markup describe the same profit with different bases. A 40% margin is not a 40% markup.
What if
About this calculator
What this calculator does
It reports profit, margin percent, and markup percent. You can start from cost and revenue, or from cost and a target margin. The second mode solves the revenue you would need.
How it is calculated
Profit is revenue minus cost. Margin divides that profit by revenue. Markup divides it by cost:
margin = (revenue - cost) / revenue * 100
markup = (revenue - cost) / cost * 100
If you know the margin instead of the revenue:
revenue = cost / (1 - margin / 100)
Margin and markup
They are not the same percent. A cost of 60 and a revenue of 100 produce a profit of 40. Margin is 40 / 100, or 40%. Markup is 40 / 60, or 66.67%. Same dollars, different base.
Assumptions and limits
The numbers are for one cost and one revenue. Overhead, taxes, and payment fees are included only if you put them in the cost. This is an educational estimate, not financial, tax, or lending advice.
Sources and method
Standard arithmetic with no outside data. The formula is shown under How it is calculated, and unit tests check worked examples, including edge cases.
This page uses arithmetic only, with no outside data.
Questions
Why is markup higher than margin?
Markup divides profit by the smaller base, the cost. Margin divides profit by revenue, which includes the profit.
Can margin be 100%?
Only if cost is zero. The target-margin mode stops below 100% because the revenue formula would divide by zero.
What if revenue is below cost?
Profit, margin, and markup are negative. That is a loss, not an error.
Should I put fees in the cost?
Yes, if you want them in the profit. The calculator does not add fees on its own.
Is this an accounting statement?
No. It is an educational estimate for one cost and one revenue figure.