Profit Margin & Markup Calculator (Gross Margin & Markup Rate)

Dual-mode business calculator to compute gross profit margin percentage and product markup rate from cost and selling price.

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What This Calculator Does

Dual-mode business calculator to compute gross profit margin percentage and product markup rate from cost and selling price.

How to Use This Calculator?

  1. Select mode tab: Profit Margin or Markup.
  2. For Profit Margin: Enter Selling Price / Revenue and Item Cost / Expenses.
  3. For Markup: Enter Unit Cost and Target Markup Percentage.
  4. Instantly view calculated Gross Profit, Profit Margin %, Markup %, and recommended Selling Price.

Formula & Calculation Logic

Gross Profit = Selling Price - Cost | Profit Margin % = (Profit / Selling Price) * 100 | Markup % = (Profit / Cost) * 100

Worked Example & Walkthrough

Profit Margin Mode: Selling Price = $150, Cost = $90 => Profit = $60, Profit Margin = 40.00%, Markup = 66.67%. Markup Mode: Cost = $100, Markup = 50% => Selling Price = $150, Profit = $50, Profit Margin = 33.33%.

In-Depth Comprehensive Guide

Profit Margin vs. Markup: Essential Business Pricing Guide

Setting optimal product and service prices requires understanding the mathematical relationship between Profit Margin and Markup.

Margin vs. Markup Definitions

  • Profit Margin: Expresses profit as a percentage of the final Selling Price. Margin % = (Profit ÷ Selling Price) × 100
  • Markup: Expresses profit as a percentage of the original Cost Price. Markup % = (Profit ÷ Cost) × 100

Worked Examples

  • Margin Mode: Item Cost = $90, Selling Price = $150. Gross Profit = $60. Profit Margin = 40.00%, Markup = 66.67%.
  • Markup Mode: Cost = $100, Target Markup = 50%. Selling Price = $150, Gross Profit = $50, Profit Margin = 33.33%.

Frequently Asked Questions (FAQ)

Markup is calculated relative to a smaller base figure (Cost), whereas Margin is calculated relative to a larger base figure (Selling Price).

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