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Profit Margin & Markup Calculator
Computes gross profit, profit margin percentage, and retail markup on cost.
Profit Margin & Markup Calculator
Computes gross profit margin percentage of revenue versus retail markup on cost
Retail Benchmarks:
Gross Profit Margin (% of Revenue)
40%
Markup on Cost: 66.67%
Gross Profit$40
Cost Share (% of Price)60%
Dollar Multiplier1.67x
Revenue Breakdown:Total Selling Price: $100
Gross Margin = (($100 - $60) / $100) × 100% = 40%; Markup on Cost = (($100 - $60) / $60) × 100% = 66.67%
Profit Margin vs Markup
Profit margin expresses profit as a percentage of the selling price, whereas markup expresses profit as a percentage of the original cost price.
Formula & Step-by-Step Calculation
Profit Margin % = [(Price - Cost) / Price] × 100%, Markup % = [(Price - Cost) / Cost] × 100%
Relationship between cost, price, and margins.
Worked Step-by-Step Examples
Example 1
Item costs $60 and sells for $100
Solution: Profit = $40.00, Gross Margin = 40.00%, Markup = 66.67%
• Margin = (40 / 100) × 100 = 40%; Markup = (40 / 60) × 100 = 66.67%
Common Real-World & Academic Use Cases
- ✓ E-commerce product pricing and discount modeling
- ✓ Retail wholesale inventory purchasing decisions
- ✓ Financial accounting statement analysis
How to Use the Profit Margin & Markup Calculator
1
Enter Cost & Price
Input cost price and retail selling price.
2
View Margins
Inspect profit margin % and markup %.
Frequently Asked Questions
Q: Can profit margin ever exceed 100%?
No, profit margin cannot exceed 100% (unless selling price is negative). Markup, however, can easily exceed 100%, 200%, or more.