Profit Margin Calculator

What Is a Profit Margin Calculator?

A Profit Margin Calculator helps businesses and sellers determine how much profit they make from sales. It calculates profit margin percentage based on cost price and selling price.

How Profit Margin Is Calculated

Profit margin shows how much of the selling price is profit after covering costs. It is expressed as a percentage and helps evaluate business efficiency.

Profit Margin Formula

Profit = Selling Price − Cost Price
Profit Margin (%) = (Profit ÷ Selling Price) × 100

Why Profit Margin Matters

Helps evaluate business performance
Assists in pricing decisions
Measures financial health
Compares profitability across products

Common Uses of a Profit Margin Calculator

This calculator is widely used by shop owners, online sellers, manufacturers, service providers, and startups to ensure profitable pricing.

Profit Margin vs Markup

Profit margin is different from markup. Margin is calculated on selling price, while markup is calculated on cost price.

Limitations of Profit Margin Calculators

This calculator does not include operating expenses, taxes, or overhead costs unless they are part of the cost entered by the user.

Frequently Asked Questions

<h3>What is a good profit margin?</h3>
<p>
A good profit margin depends on the industry, but 10%–20% is often considered healthy.
</p>

<h3>Is profit margin the same as markup?</h3>
<p>
No. Profit margin is calculated on selling price, while markup is calculated on cost price.
</p>

<h3>Can this calculator be used for services?</h3>
<p>
Yes. Enter total service cost and selling price to calculate profit margin.
</p>

<h3>Does this calculator include tax?</h3>
<p>
No. Taxes should be included in cost or excluded from revenue depending on your accounting method.
</p>

<h3>Is this profit margin calculator accurate?</h3>
<p>
Yes. It uses standard business formulas for accurate results.
</p>