Profit Margin Calculator
Revenue in, cost in, margin out — plus the markup that produced it.
Method and limitations · Report an error
Quick answer
Calculate profit margin from revenue and cost
The calculator subtracts cost from revenue to find gross profit, then divides that profit by revenue to calculate margin. It also shows markup against cost so the two percentages can be compared on the same figures.
Use this calculator when
- Measuring margin on a product, order or period
- Comparing margin with markup before changing a price
- Checking how much of revenue is consumed by cost
How to read the result
A positive margin means revenue is higher than the entered cost. A negative margin means cost is greater than revenue. The result is only gross or net margin if the figures entered match that accounting basis.
- Match the revenue period and cost period
- Do not mix gross revenue with a net-cost figure or the reverse
Method
How it works
Enter total revenue and the cost associated with producing it. The difference is gross profit, and dividing that profit by revenue gives the profit margin.
Markup uses cost as its base instead, while the cost ratio shows the share of revenue consumed by cost. This is why markup and margin are not interchangeable.
Common questions
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by revenue, while markup divides profit by cost.
Can profit margin be negative?
Yes. Margin is negative when cost is greater than revenue.
Should I enter gross or net revenue?
Enter the revenue figure that matches the margin you want to measure: gross revenue before returns and discounts for a gross sales view, or net revenue after those deductions for a net sales view. Keep the cost figure on the same basis.
Not financial advice. This calculator is for general informational purposes only. Check figures independently before making financial decisions.