How to Calculate Margin
What is Margin?
A margin calculator determines gross profit margin, net profit margin, and markup for a product or business. Margin is the percentage of revenue retained as profit; markup is the percentage added to cost to reach the selling price.
Step-by-Step Guide
- 1Gross margin = (Revenue − COGS) / Revenue × 100%
- 2Markup = (Revenue − Cost) / Cost × 100%
- 3Net margin = Net profit / Revenue × 100%
- 4Margin and markup are NOT the same: 50% markup = 33% margin
Worked Examples
Input
Cost $40, Price $60
Result
33.3% margin, 50% markup
Common confusion — they are different!
Input
Revenue $500k, COGS $300k, expenses $100k
Result
40% gross margin, 20% net margin
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