How it works
Gross profit is revenue minus the entered cost. Margin expresses this profit as a percentage of revenue, while markup compares profit to cost. This tool does not deduct business overhead, interest, or tax, so it does not calculate net profit.
Standard formula
margin = (revenue − cost) / revenue × 100Worked example
Selling for 100 with a cost of 60 gives 40 gross profit, a 40% margin, and a 66.67% markup.
Frequently Asked Questions
Are margin and markup the same?
No. Margin divides profit by revenue; markup divides it by cost.
Can the margin be negative?
Yes. If cost exceeds revenue, the result represents a gross loss.
What if cost is zero?
Margin is 100% for positive revenue, but markup is undefined because its denominator is zero.
Does it calculate net profit?
No. Entered cost is subtracted from revenue, without separately modelling overhead or taxes.