InovoTools
Business Tools

Profit Margin Calculator: Gross Margin From Cost and Revenue

Enter your cost and your selling price to see profit and profit margin. Margin is profit as a share of revenue, which is different from markup, the profit as a share of cost.

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How to use the Profit Margin Calculator

Fill in the fields above and the result appears straight away. Everything runs in your browser, so nothing you type is uploaded.

The formula

profit = revenue − cost; margin = profit ÷ revenue × 100

Examples

  • Cost 60, revenue 100
    Profit: 40
    Profit margin: 40%
  • Cost 35, revenue 50
    Profit: 15
    Profit margin: 30%
  • Cost 800, revenue 1,000
    Profit: 200
    Profit margin: 20%

Limitations and assumptions

Does not allocate overhead, tax, financing or other accounting adjustments.

Frequently asked questions

How do I calculate profit margin?

(Revenue − cost) ÷ revenue × 100.

What is the difference between margin and markup?

Margin divides profit by revenue; markup divides it by cost. A 100 item costing 60 has a 40% margin and a 66.7% markup.

What is a good profit margin?

It varies widely by industry; compare against similar businesses.

Does it include overhead and tax?

No. It is a gross margin from the two numbers you enter.