Profit margin

Profit margin: the basics

Calculate profit on one sale, profit margin as a share of selling price, and markup as a share of cost.

How to use the inputs

• Selling price: Enter the positive selling price for one sale or a consistent batch.
• Total cost: Enter the total cost on the same basis. Include the costs relevant to the margin you want to measure.

Change an input to update the results. Add up to four scenarios to compare separate assumptions; reset affects only the selected scenario.

Understanding the results

• Profit margin divides profit by selling price. Profit per sale is selling price minus cost.
• Markup on cost divides the same profit by cost. Its denominator is different, so markup and margin are not interchangeable.
• A loss produces a negative margin. The comparison bars use absolute height; read the signed percentage to distinguish a loss from a profit.

The formula, in words

Profit G = S − C. Profit margin = G ÷ S × 100%. Markup on cost = G ÷ C × 100%.

S is selling price (the revenue input), C is the total cost for that sale, and G is profit. Selling price must be positive.

When C = 0, markup is undefined and is shown as “Not defined”; with a positive selling price, margin is then 100%.

Assumptions and limits

• Price and cost refer to the same sale or batch and use the same currency. There is no time period, interest or compounding.
• No tax, fee, overhead or discount is added automatically. The result is only a net or gross margin if your chosen cost inputs make that description appropriate.
• Negative profit is allowed when cost exceeds selling price. Percentages display at most one decimal place; calculations retain full precision.

Currency results display whole units; other numbers show at most one decimal place. Calculations keep full precision unless whole units must be rounded up for break-even. Rounded figures may not add up exactly.

Examples below use USD and local number formatting. Country selection changes currency labels, formatting and terminology; it does not convert money or automatically apply local tax or lender rules.

Worked example

This fixed example uses the calculator’s default inputs; it does not change when you edit a scenario. Any example interest or return rate is an assumption, not a guaranteed outcome.

Selling price

USD 100

Total cost

USD 65

Profit is USD 100 − USD 65 = USD 35. Dividing profit by USD 100 gives a margin of 35%. Dividing the same profit by USD 65 gives markup of 53.8%, rounded to one decimal place.

Profit margin

35%

Profit per sale

USD 35

Markup on cost

53.8%

Common questions