Business ToolsProfitability ToolsFree Tool
Profit Margin Calculator
Calculate your profit amount and profit margin percentage from total revenue and total cost.
How to Use Profit Margin Calculator
- 1Enter your total revenue
- 2Enter your total cost
- 3Click Calculate to see your profit amount and profit margin percentage
About Profit Margin Calculator
What it computes
Enter revenue and cost. The tool shows profit (revenue − cost) and margin as a percentage of revenue: (revenue − cost) ÷ revenue × 100.
Example
Revenue Rs. 1,00,000 and cost Rs. 60,000 gives a profit of Rs. 40,000 and a margin of 40%.
Margin versus markup
These are often confused. Margin divides profit by the selling price; markup divides profit by cost. The same sale has a 40% margin but a 66.7% markup (40,000 ÷ 60,000). If you price by adding a markup to cost, the margin will always be lower than the markup. This tool reports margin only.
Limits
- It is a single gross figure. If cost leaves out overheads, tax or shipping, the result is gross margin, not net margin.
- Entering zero revenue produces an undefined result.
- A negative result means a loss, which is shown as a negative margin.
To check marketplace pricing after fees, use the Amazon FBA calculator, and for advertising efficiency the ROAS calculator.
Frequently Asked Questions
This tool reports a single margin % (and rupee profit) from your revenue and cost. Margin vs Markup Calculator computes both markup % and margin % side by side from a cost/price pair, specifically to compare the two metrics.
It's a generic margin calculation: (revenue − cost) ÷ revenue. Whether that represents gross, operating, or net margin depends on what you count as 'cost' — include only COGS for gross margin, or all operating expenses for operating margin.
It varies enormously by industry — grocery/retail margins are often under 5%, while software/services margins can exceed 20-30%. Compare against your specific industry benchmark rather than a universal target.
No — this is a pre-tax calculation. Your net profit after income tax will be lower than the margin shown here.