Financial Tool
Profit Margin Calculator
Calculate gross profit margin percentage.
Revenue & Costs
# About This Calculator
The Profit Margin Calculator is an essential tool for any business owner. It calculates the Gross Profit Margin, which represents the portion of each dollar of revenue that the company retains as gross profit.
The Big Confusion: Margin vs. Markup
These two terms are often used interchangeably but mean very different things:
- Margin is based on Revenue (Selling Price). If you sell for $100 and cost is $50, your margin is 50%. (Profit / Revenue).
- Markup is based on Cost. If cost is $50 and you add $50 profit, your markup is 100%. (Profit / Cost).
A 50% Margin is mathematically equal to a 100% Markup. Mistaking one for the other can lead to serious underpricing.
Frequently Asked Questions
What is a good profit margin?+
It varies widely by industry. Grocery stores often run on thin margins (1-3%), while software companies can have margins of 80%+. Generally, a 10% net margin is considered healthy for a small business.
Why is Margin always lower than Markup?+
Because Margin divides profit by the (higher) selling price, while Markup divides profit by the (lower) cost. Margin can never exceed 100%, but Markup can be infinite.
Gross vs Net Margin?+
Gross Margin includes only direct costs (COGS). Net Margin includes ALL expenses (rent, payroll, taxes). This calculator focuses on Gross Margin.
Is Profit Margin Calculator free to use?+
Yes, Profit Margin Calculator on Matheric is completely free to use. We believe in accessible education and utility for everyone.
How accurate is Profit Margin Calculator?+
We use standard mathematical formulas and high-precision computing algorithms to ensure results for Profit Margin Calculator are accurate for academic and professional use.
Can I use Profit Margin Calculator on my phone?+
Yes! Profit Margin Calculator is fully responsive and optimized for all devices, including smartphones, tablets, and desktops.