Calculator
Profit Margin Calculator
Profit margin tells you how much of every rupee of sales you actually keep after costs — the clearest measure of whether your pricing works. This calculator takes your revenue and cost and returns the profit, the profit margin (profit as a share of revenue), and the markup (profit as a share of cost). Use it to price products, compare product lines, and check whether a discount still leaves you a healthy margin.
Cost vs profit
- Cost₹70,00070%
- Profit₹30,00030%
This measures gross profitability on the figures you enter. For net margin, use revenue and total cost including overheads, taxes, and indirect expenses.
What your result means
- Margin is profit as a percentage of revenue; markup is profit as a percentage of cost — the same rupee profit gives a higher markup than margin, so do not confuse the two when pricing.
- Net margin (after all costs, including overheads and tax) is what really matters; a healthy gross margin can still end in a thin or negative net margin.
- Benchmark against your industry — a 30% margin is great in retail but thin in software; thin-margin businesses must win on volume.
How to use this calculator
- Enter the revenue — the price you sell at (per unit or total).
- Enter the cost — what it costs you to make or buy the same thing.
- Read the profit, then the margin and markup percentages.
- Use margin to judge profitability; use markup when setting price up from cost.
- Test a discount by lowering revenue to see how fast margin shrinks.
The formula
Profit = Revenue − Cost. Profit margin (%) = (Profit ÷ Revenue) × 100. Markup (%) = (Profit ÷ Cost) × 100. Margin can never exceed 100%; markup can.
Worked example
You sell a product for ₹1,00,000 that costs you ₹70,000. Profit = ₹30,000. Margin = 30,000 ÷ 1,00,000 = 30%. Markup = 30,000 ÷ 70,000 ≈ 42.9%. The same ₹30,000 profit is a 30% margin but a ~43% markup — which is why quoting “margin” and “markup” interchangeably leads to underpricing.
When to use it
- Setting a selling price from a known cost using a target markup.
- Comparing the profitability of different products or services.
- Checking whether a proposed discount still leaves an acceptable margin.
- Explaining to a client or partner why a price is what it is.