Profit Margin Calculator

Profit margin tells you what percentage of revenue is profit. It is the standard metric used in financial statements and investor reports because it scales naturally with revenue. A 40% margin means you keep $0.40 of every dollar sold.

Markup tells you how much you added to your cost when setting the price. Retailers and wholesalers often think in markup because it directly ties pricing decisions to procurement costs. A 50% markup means you charged 50% more than what you paid.

Confusing the two can lead to underpricing. For example, if you want a 30% profit margin but instead apply a 30% markup, your actual margin will be only about 23%. Always clarify which metric your team is using when setting prices.