๐น Profit Margin Calculator
Free Profit Margin Calculator โ Know Your Business Profitability
Our free Profit Margin Calculator is an indispensable tool for entrepreneurs, business owners, product managers, and retailers. It helps you understand exactly how much profit you're making on each sale, expressed both as a monetary value and as a percentage.
Key Metrics Explained
- Profit Amount: Selling Price โ Cost Price = absolute profit per unit.
- Profit Margin (%): (Profit รท Selling Price) ร 100. This is how much of each rupee in revenue is actual profit.
- Markup (%): (Profit รท Cost Price) ร 100. This is how much above cost you've priced the product.
Profit Margin vs. Markup โ What's the Difference?
Profit margin is calculated relative to the selling price, while markup is calculated relative to the cost price. For example, if cost = โน500 and selling price = โน800: Profit = โน300, Margin = 37.5%, Markup = 60%. These are very different numbers, so it's important to know which metric your business uses.
Example Calculation
A retailer buys a product for โน300 and sells it for โน500. The calculator shows: Profit = โน200, Margin = 40%, Markup = 66.67%.
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Frequently Asked Questions
Profit Margin (%) = (Selling Price - Cost Price) / Selling Price ร 100. It tells you what percentage of your revenue is profit.
A "good" margin varies by industry. Retail typically sees 2โ5%, software 60โ80%, restaurants 3โ9%. Generally, any margin above 20% is considered healthy for most businesses.
Markup is (Profit รท Cost) ร 100, while Margin is (Profit รท Revenue) ร 100. A 50% markup equals a 33.33% margin. Always clarify which metric is being used in business discussions.
Yes! If the selling price is lower than the cost price, the calculator will show a negative profit and negative margin, indicating a loss.