💰 Finance Calculator
Margin Calculator
Enter any two values — cost, revenue, profit, or margin % — and we'll solve for the rest instantly. Includes markup converter and margin health rating.
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Cost
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Margin
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Revenue
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Margin
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Markup %
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Multiplier
How to Calculate Profit Margin
Profit margin tells you what percentage of your revenue is actual profit — after subtracting the cost of goods sold. It's one of the most important numbers in any business.
Gross Margin Formula
Margin (%) = (Profit ÷ Revenue) × 100
Profit = Revenue − Cost
Revenue = Cost ÷ (1 − Margin/100)
Cost = Revenue × (1 − Margin/100)
Profit = Revenue − Cost
Revenue = Cost ÷ (1 − Margin/100)
Cost = Revenue × (1 − Margin/100)
Example: You buy a product for $30 and sell it for $50. Profit = $20. Margin = (20 ÷ 50) × 100 = 40%.
Margin vs. Markup — What's the Difference?
These two are often confused. Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. Same dollar profit, different percentages.
| Concept | Formula | Example ($30 cost, $50 price) |
|---|---|---|
| Margin | Profit ÷ Revenue × 100 | $20 ÷ $50 × 100 = 40% |
| Markup | Profit ÷ Cost × 100 | $20 ÷ $30 × 100 = 66.7% |
| Multiplier | Revenue ÷ Cost | $50 ÷ $30 = 1.67× |
What Is a Good Profit Margin?
There is no single "good" margin — it depends on industry, business model, and scale. Here's a general guide:
| Margin Range | Rating | Common Industries |
|---|---|---|
| Below 5% | ⚠️ Very Low | Grocery, wholesale, logistics |
| 5% – 10% | 🟡 Below Average | Retail, food service, manufacturing |
| 10% – 20% | 🔵 Healthy | E-commerce, consulting, services |
| 20% – 35% | 🟢 Strong | SaaS, professional services |
| 35%+ | 🌟 Exceptional | Software, pharmaceuticals, luxury |
How to Convert Margin to Markup
Markup = Margin ÷ (1 − Margin/100)
Margin = Markup ÷ (1 + Markup/100)
Margin = Markup ÷ (1 + Markup/100)
For example, a 40% margin equals a 66.7% markup. This distinction matters when quoting suppliers vs. setting customer prices.
Frequently Asked Questions
Gross profit margin is your revenue minus the direct cost of goods sold (COGS), expressed as a percentage of revenue. It shows how efficiently a company produces or sources its products, before accounting for operating expenses like salaries, rent, and marketing.
Gross margin only subtracts the cost of goods sold from revenue. Net margin subtracts all expenses — COGS, operating costs, taxes, interest, and more. Net margin shows what actually ends up as profit after running the whole business. Investors typically focus on net margin when evaluating company health.
Divide your cost by (1 − 0.30) = 0.70. So if your cost is $70, your selling price should be $70 ÷ 0.70 = $100. Profit = $30. Margin = 30%. Using this calculator: enter Cost = $70 and Margin = 30%, and it will show Revenue = $100 and Profit = $30.
Because they use different denominators. Margin uses revenue (the larger number) as the base, while markup uses cost (the smaller number). The same dollar profit divided by a larger number produces a smaller percentage. A 50% markup always corresponds to a 33.3% margin.
Yes. A negative margin means you are selling below cost — losing money on every sale. This might be intentional short-term (to gain market share or clear inventory), but is unsustainable long-term. Startups sometimes operate at negative gross margin in early stages, expecting to improve unit economics at scale.
Enter your Cost and your desired Margin %. The calculator will compute the Revenue (selling price) you need to achieve that margin. For example: Cost = $50, Margin = 25% → Revenue = $66.67. This is the minimum price you should charge to hit a 25% margin.
The multiplier (also called "keystone" in retail) is simply Revenue ÷ Cost. A multiplier of 2× means you sell at double your cost — a 50% margin. A 1.5× multiplier means 33.3% margin. Many retailers use multipliers as a quick pricing rule: "We always price at 2.5× our cost."
There are only two levers: increase revenue or decrease cost. Practically this means: raising prices (test customer sensitivity first), negotiating better supplier deals, reducing waste or defects, switching to higher-margin products, or bundling services. Even a 2–3% margin improvement can significantly impact profitability at scale.
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