Calculate profit margins with our free online business calculator. Perfect for analyzing profitability, pricing strategies, and financial planning for your business.
Enter revenue and cost to calculate profit margins and markup percentages
Follow these simple steps to analyze your business profitability and margins
Input your total revenue or selling price for the product or service.
Enter the total costs or expenses associated with the revenue.
View profit margins, markup percentages, and profitability analysis.
Comprehensive business tools for accurate margin analysis and financial planning
Calculate gross margin, net margin, and markup percentages in one analysis.
Comprehensive profitability analysis for informed business decisions.
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Understanding the key differences between margin and markup for business analysis
| Metric | Formula | Purpose | Example |
|---|---|---|---|
| Margin | (Revenue - Cost) / Revenue × 100 | Profitability analysis | ($100 - $60) / $100 = 40% |
| Markup | (Revenue - Cost) / Cost × 100 | Pricing strategy | ($100 - $60) / $60 = 67% |
| Profit | Revenue - Cost | Absolute earnings | $100 - $60 = $40 |
Common questions about profit margins and business profitability analysis
Margin is profit as a percentage of revenue (selling price), while markup is profit as a percentage of cost. Margin = (Revenue - Cost) / Revenue × 100. Markup = (Revenue - Cost) / Cost × 100.
Good profit margins vary by industry. Generally, 5-10% is low, 10-20% is good, and 20%+ is excellent. Service businesses often have higher margins than retail businesses.
Increase your selling price, reduce costs, improve efficiency, focus on higher-margin products, or add value to justify premium pricing.
Gross margin considers only direct costs (cost of goods sold), while net margin includes all expenses (operating costs, taxes, interest). Net margin gives a complete picture of profitability.
Yes, negative margins occur when costs exceed revenue, resulting in a loss. This might happen during promotional periods, market entry, or when costs are too high.
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