How do I calculate profit margin percentage?

Profit margin % = (Profit / Revenue) × 100. First, calculate profit by subtracting cost from revenue. For example, if revenue is $1,000 and cost is $600: Profit = $400, so (400 / 1000) × 100 = 40% profit margin.

What is the difference between profit margin and markup?

Profit margin is profit divided by revenue (selling price). Markup is profit divided by cost (what you paid). A 50% profit margin equals a 100% markup. They represent different perspectives on the same profit.

What is a good profit margin percentage?

A "good" profit margin varies by industry. Retail typically sees 5-10%, restaurants 3-5%, software companies 20-40%. Generally, 10% is considered average, 20% is good, and 25%+ is excellent.

How do I increase my profit margin?

Increase profit margin by either raising prices (increasing revenue) or reducing costs. Focus on high-margin products, negotiate better supplier rates, reduce waste, or add value to justify higher prices.

Profit Margin Calculator

Calculate profit margin percentage, profit amount, and markup percentage for your business.

Calculate

Revenue ($)

Cost ($)

Formula

Profit Margin % = (Profit / Revenue) × 100

Example

revenue:1000

cost:600

profit:400

profit Margin:40

markup:66.67

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