Margin Calculator
Calculate profit margins, revenue, costs, and profits for your business
Calculate Business Margins
How much you paid for the goods you sell
How much you sell the goods for
Revenue minus costs (gross profit)
Profit margin as a percentage of revenue
Calculation Results
Additional Business Metrics
Formulas Used
Margin Analysis
Example Calculation
Retail Business Example
Product: Electronics accessory
Cost (COGS): $30 (wholesale price)
Revenue: $50 (retail selling price)
Calculations
Profit = Revenue - Cost = $50 - $30 = $20
Margin = (Profit ÷ Revenue) × 100 = ($20 ÷ $50) × 100 = 40%
Markup = (Profit ÷ Cost) × 100 = ($20 ÷ $30) × 100 = 66.67%
Result: 40% profit margin is excellent for retail!
Margin Guidelines
Loss Territory
Negative or zero margins mean losses
Poor Margin
High risk, little room for error
Okay Margin
Acceptable but could improve
Good Margin
Healthy business with growth room
Industry Benchmarks
Retail
2-6% net margin typical
Software/SaaS
10-20% or higher margins
Food Service
3-9% typical range
Manufacturing
5-20% depending on sector
Professional Services
10-25% typical margins
Understanding Profit Margins
What is Profit Margin?
Profit margin is the percentage of revenue that becomes profit after deducting costs. It measures how efficiently a company converts sales into profits and indicates business health and pricing strategy effectiveness.
Why is it Important?
- •Measures business profitability and efficiency
- •Helps set competitive pricing strategies
- •Indicates financial health and sustainability
- •Enables comparison with industry benchmarks
Key Formulas
Profit Margin
Margin = (Profit ÷ Revenue) × 100
Profit
Profit = Revenue - Cost
Revenue (from margin)
Revenue = Cost ÷ (1 - Margin%)
Margin vs Markup: Margin is based on revenue, markup is based on cost. A 50% markup equals a 33.33% margin.