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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
Cost Basis: $60 (60%)Gross Profit: $40 (40%)
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.

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