Profit Margin Calculator
Calculate profit margin, markup percentage, and required revenue from unit cost and sales price or target margin.
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This profit margin calculator determines gross profit, profit margin percentage, and markup percentage from your product cost and selling price. It also works in reverse by calculating the required selling price and expected profit when you provide your unit cost alongside a target profit margin. When evaluating sales from revenue, profit equals total revenue minus cost. The margin percentage reflects profit divided by revenue, whereas markup reflects profit divided by cost. If revenue is zero, the margin percentage cannot be evaluated, and if cost is zero, the markup percentage is reported as unavailable. When planning prices with a target margin, enter your production or wholesale cost and the desired margin rate below 100 percent. The tool computes the necessary revenue to achieve that target alongside net dollar profit. All financial figures, percentage rates, and calculated price points round to two decimal places using standard half-up rounding for clear commercial estimates.
Instructions
- Choose a calculation mode: calculate from revenue to analyze an existing price, or calculate from margin to find a target selling price.
- Enter your cost as a non-negative number in the Cost field.
- If calculating from revenue, enter your selling price in the Revenue field.
- If calculating from margin, enter your desired profit margin percentage below 100 in the Target Margin field.
- Click Calculate to view profit, margin, markup, and selling price figures rounded to two decimal places.
Examples
- A product costs $40 to manufacture and sells for $100. Calculating from revenue yields $60.00 in gross profit, a 60.00% profit margin, and a 150.00% markup.
- A wholesale item costs $75, and you want a 25% profit margin. Calculating from margin determines a target selling price of $100.00 and a gross profit of $25.00.
FAQ
What is the difference between profit margin and markup?
Profit margin measures gross profit as a percentage of selling price, whereas markup measures gross profit as a percentage of the original cost.
Why does a target margin of 100 percent or higher fail?
A margin of 100 percent or higher would require infinite or negative revenue for any positive cost, so the target margin must remain strictly below 100 percent.
How are calculations rounded?
All monetary values, profit margins, and markup percentages round to two decimal places using standard half-up rounding.
What happens if cost or revenue is set to zero?
When cost is zero, markup percentage is unavailable. When revenue is zero in revenue mode, profit equals negative cost and margin percentage is unavailable.