business calculator
Calculate margin, markup, and gross profit.
Save this tool to quickly calculate and check profit margins before pricing new products or bidding on contracts.
Gross profit
$38,000
Formula
Margin = (revenue - cost) / revenueMargin shows profit as a percentage of revenue, while markup compares profit with cost.
Step by step
Example
$100,000 in revenue and $62,000 in cost leaves $38,000 gross profit, or a 38% margin.
Related guides
Guide
Learn how to calculate gross margin, operating margin, and net profit margin. Understand what each margin reveals about your business financial health and efficiency.
Guide
Understand the critical difference between markup and margin, how discount depth affects profit, and strategic pricing approaches to maximize revenue and profitability.
Summary
Gross Margin
38.00%
Markup Rate
61.29%
Gross Profit
$38,000
Cost-to-Revenue Ratio
62.00%
D3 visualization
Compare the portion of your sales revenue consumed by costs vs. the portion kept as profit.
D3 visualization
Profit margin is calculated relative to selling price, while markup is relative to wholesale cost.
Guide
While both profit margin and markup represent gross profit, they calculate it relative to different benchmarks. Profit margin measures profit relative to sales price (revenue), while markup measures profit relative to unit cost.
Understanding both is key to commercial success: margin shows how much of each dollar of sales you keep, whereas markup shows how much you added to the cost to set the selling price.
Gross profit margin
The percentage of revenue that remains after subtracting cost of goods sold (COGS).
Markup
The percentage added to cost of goods sold to determine the final retail price.
A good profit margin varies widely by industry. Service businesses often have gross margins over 60%, while retail, grocery, and manufacturing companies might operate on thinner margins of 10% to 30% but have higher transaction volume.
Markup uses cost as its denominator, which is always smaller than the sales price (revenue) used as the margin denominator. For example, an item costing $50 and selling for $100 has a 100% markup but a 50% margin.