Calculators
Profit Margin Calculator
From a cost and selling price, find the profit, the profit margin and the markup, three numbers people often mix up.
About the Profit Margin Calculator
The Profit Margin Calculator takes a cost and selling price and shows the profit (or loss), the profit margin and the markup, with a bar showing how much of each sale is cost and how much is profit. A target-margin slider tells you the price to charge for the margin you want.
What you can do with the Profit Margin Calculator
- Profit, margin, markup: All three from a cost and selling price.
- Cost vs profit bar: See how much of each sale is profit.
- Target margin: A slider tells you the price for the margin you want.
- Spot losses: A selling price below cost is flagged clearly.
Margin and markup are not the same
This is the single most common pricing mistake. Margin is profit as a share of the selling price; markup is profit as a share of the cost. Buy at ₹800 and sell at ₹1,000, and you have a 20% margin but a 25% markup, same ₹200 profit, two different percentages.
Pricing for a target margin
If you want to keep 30% of every sale as profit, don't add 30% to the cost, that only gives about a 23% margin. Divide the cost by (1 − 0.30) instead. The "Price for a target margin" slider does this for any margin.
Spotting a loss
If the selling price is below the cost, the result switches to "Loss" with a red label, so a pricing mistake is hard to miss.
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Frequently Asked Questions
Which is bigger, margin or markup?
Markup is always the larger percentage, because it divides by the smaller number (the cost) rather than the selling price.
How do I reach a target margin?
Divide the cost by (1 − margin). For a 20% margin on an ₹800 item: 800 ÷ 0.80 = ₹1,000. Or use the target-margin slider.
How do I calculate profit margin?
Subtract the cost from the selling price, then divide the profit by the selling price and multiply by 100. For example, cost ₹500 and selling price ₹650 give ₹150 profit, a margin of 23.08% and a markup of 30%.
What happens if I sell below cost?
The calculator shows a Loss instead of a profit, marks it as selling below cost, and the margin turns negative. For example, cost ₹1,000 and selling price ₹900 give a ₹100 loss, a margin of −11.11% and a markup of −10%.
How do I convert margin to markup and back?
Markup = margin ÷ (100 − margin), and margin = markup ÷ (100 + markup), all in percent. A 20% margin equals a 25% markup, and a 40% margin equals about a 66.67% markup.
What price gives a 40% margin on a ₹600 cost?
Divide the cost by (1 − 0.40): ₹600 ÷ 0.6 = ₹1,000. That leaves ₹400 profit, which is a 40% margin but a 66.7% markup. Set the Target margin slider to 40% to get this directly.
Should I include GST in the cost and selling price?
If you are registered and claim input tax credit, use prices without GST, because the GST you collect is passed on to the government and is not your income. If you cannot claim credit, the GST you pay is part of your cost.
How does a discount affect my margin?
A discount comes straight out of profit. With cost ₹800 and price ₹1,000, the margin is 20%. A 10% discount cuts the price to ₹900, so profit halves to ₹100 and the margin falls to 11.11%.
Is this gross margin or net margin?
It is whatever your cost includes. With only the purchase or making cost, you get gross margin. To get closer to net margin, add per-item costs such as shipping, packaging and marketplace or payment fees to the cost price.
What is a good profit margin?
There is no single good number. Margins vary widely by industry: groceries and electronics often run on thin margins, while services and software can be much higher. Compare with similar businesses and make sure the margin covers rent, salaries and other overheads.
How do I calculate profit margin in Excel?
With cost in A2 and selling price in B2, use =(B2-A2)/B2 and format the cell as a percentage. For markup, use =(B2-A2)/A2. For a target margin in C2 written as a decimal, the price is =A2/(1-C2).
Read the guide
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