Margin Calculator

Calculate gross profit margin, markup, and revenue from cost and selling price.

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Margin Calculator Results

Gross Profit
₹20.00
Gross Margin
33.3333%
Markup
50%
Cost
₹40.00
Revenue
₹60.00

How It Works & Formula

Mathematical Formula

Margin % = (Revenue - Cost) / Revenue × 100  |  Markup % = (Revenue - Cost) / Cost × 100

Margin is profit relative to revenue; markup is profit relative to cost.

📐 Step-by-Step Calculation Breakdown

Substituted values from your current calculation inputs:

Cost: ₹40
Selling Price (Revenue): ₹60

How to Use This Calculator

  1. Enter cost and selling price, or choose to solve from margin % or markup %.
  2. Click Calculate.

Example Calculation

Cost 40, sell 60: margin = 33.33%, markup = 50%.

Understanding the Results

Margin and markup look similar but differ. A 50% markup equals only a 33.3% margin.

Margin Calculator — Gross Profit Margin vs. Markup % on Cost

One of the most frequent financial errors in retail and wholesale enterprise is conflating gross margin with markup. While both express profitability, they use completely different denominators. The Margin Calculator solves for revenue, cost, gross profit, margin percentage, and markup percentage simultaneously.

1. Why Margin and Markup Are NOT the Same

• Gross Margin: The percentage of total revenue (sales price) that remains after covering Cost of Goods Sold (COGS).
• Markup: The percentage added to cost price to arrive at the selling price.

The Golden Rule: Markup will ALWAYS be higher than gross margin for any profitable transaction. A 50% markup on cost produces only a 33.3% gross margin on revenue!

2. The Mathematical Formulas

Gross Profit = Revenue − Cost
Gross Margin (%) = (Gross Profit ÷ Revenue) × 100
Markup (%) = (Gross Profit ÷ Cost) × 100

Conversion Formulas:
• Markup = Margin ÷ (1 − Margin)
• Margin = Markup ÷ (1 + Markup)

3. Margin to Markup Quick Conversion Matrix

Desired Gross Margin (%)Required Markup on Cost (%)Multiplier on Cost
10%11.1%1.111×
20%25.0%1.250×
25%33.3%1.333×
30%42.9%1.429×
40%66.7%1.667×
50%100.0%2.000× (Double cost)
60%150.0%2.500×
75%300.0%4.000×

4. Worked Commercial Scenario

Scenario: You manufacture a product for ₹600. Your business requires a 40% gross margin to cover overhead, sales commissions, and profit.

Common Mistake: Adding 40% to ₹600 = ₹600 + ₹240 = ₹840 selling price. At ₹840, your profit is ₹240, which is only ₹240 ÷ ₹840 = 28.6% margin! You missed your target by 11.4%.

Correct Calculation:
• Selling Price = Cost ÷ (1 − Target Margin) = ₹600 ÷ (1 − 0.40) = ₹600 ÷ 0.60 = ₹1,000.
• Gross Profit = ₹1,000 − ₹600 = ₹400.
• True Margin = (₹400 ÷ ₹1,000) × 100 = 40.0%.
• Equivalent Markup Required = (₹400 ÷ ₹600) × 100 = 66.67%.
Financial Disclaimer: Financial Disclaimer: Calculation results and projections are provided for educational and illustrative purposes only and do not constitute financial, investment, lending, or tax advice. Actual borrowing terms, interest rates, and loan charges are determined by lenders and underwriting policies.

Frequently Asked Questions

  • What is a good profit margin?

    It varies by industry. Retail typically 2-10%, software 70-80%, restaurants 3-9%. Compare to industry peers.

💼Salary, Taxes & Business Finance Cluster

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Chandan Yadav — Software Engineer & Founder, Digitac Solution
Chandan YadavFinancial Calculators

Software Engineer & Founder, Digitac Solution

Financial calculator results are estimates based on standard mathematical formulas. Actual loan terms and returns depend on lender policies and market conditions.

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