How Does This Calculator Work?
Profit margin is calculated as (revenue − cost) ÷ revenue × 100. It tells you what portion of each sales dollar is profit, as opposed to markup, which is measured against cost instead of revenue.
Profit margin tells you what percentage of your revenue is actual profit after costs. This calculator gives you that figure instantly from your revenue and cost numbers.
Example Calculation
Retail Example
An item sells for $100 and costs $60 to produce.
((100-60)/100) × 100 = 40% profit margin.