Profit Margin Calculator
Calculate profit margin, profit per unit, markup, total profit and revenue. You can also estimate the selling price required to achieve a target profit margin.
Enter Product Details
Enter the cost price and selling price per unit. Quantity is used to calculate total revenue, total cost and total profit.
Target Profit Margin Calculator
Enter your desired profit margin to calculate the selling price required based on the cost price entered above.
Profit Margin Breakdown
See how the entered cost, selling price and profit translate from a single unit to the complete sales quantity.
| Item | Per Unit | Total | % of Revenue |
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What is Profit Margin?
Profit margin shows how much of the selling price or sales revenue remains as profit after subtracting the cost included in the calculation. It is expressed as a percentage of revenue.
Profit Margin Formula
Profit Margin = Profit ÷ Selling Price × 100
Profit Margin Example
Selling Price: ₹1,000
Profit: ₹1,000 − ₹600 = ₹400
Profit Margin: ₹400 ÷ ₹1,000 × 100 = 40%
Therefore, the product has a 40% profit margin.
Profit Margin vs Markup
Profit margin and markup measure profitability differently. Profit margin compares profit with the selling price, while markup compares profit with the cost price.
Profit ÷ Selling Price × 100
Markup
Profit ÷ Cost Price × 100
For example, if a product costs ₹600 and sells for ₹1,000, the profit is ₹400. The profit margin is 40%, but the markup on cost is approximately 66.67%.
Target Profit Margin Formula
The target margin must be entered as a decimal in the formula. For example, 30% becomes 0.30.
Required Selling Price
= ₹600 ÷ (1 − 0.30)
= ₹600 ÷ 0.70
≈ ₹857.14
Why is Profit Margin Important?
Profit margin can help businesses evaluate pricing, compare products and understand how much revenue remains after the costs included in the calculation. A higher margin does not automatically mean a business is more profitable overall, because sales volume and additional operating expenses also matter.
Disclaimer: This Profit Margin Calculator is intended for educational and business-planning purposes only. It uses the cost values entered by the user and does not automatically include GST, taxes, shipping, discounts, refunds, salaries, rent, marketplace fees, financing costs or other operating expenses. Actual accounting profit margins may therefore differ.