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Margin Calculator

LAST UPDATE: August 21st, 2018

Calculator

What is a margin?

Margin is the difference between the seller’s cost of the product and the selling price. A high margin means that the seller makes a lot of profit when the item is sold, a low margin means that not as much profit is made per item.

Formula

Gross Profit = Revenue – Cost

Markup Percent = (Gross Profit / Cost) x 100%

Gross Margin Percentage = (Gross Profit / Revenue) x 100%

Example

A store sells a product at $45 that costs $25.

Gross Profit = $45 – $25 = $20

Markup Percent = ($20 / $25) x 100% = 0.8 x 100% = 80%

Gross Margin Percentage = ($20 / $45) x 100% = 0.4444 x 100% = 44.44%

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