Profit Margin Calculator
Compare revenue and cost to estimate profit, profit margin, and markup. The calculator keeps your entries in your browser and clearly identifies percentages that cannot be calculated from zero values.
Calculator
Results
How it works
Profit is the amount left after subtracting cost from revenue. A negative result means the cost exceeded the revenue.
Profit margin
Profit margin shows how much of each revenue dollar remains as profit. The formula is ((revenue - cost) / revenue) × 100. It is undefined when revenue is zero.
Markup
Markup shows profit relative to cost. The formula is ((revenue - cost) / cost) × 100. It is undefined when cost is zero.
Margin and markup describe the same profit from different starting points: margin uses revenue as the denominator, while markup uses cost. That is why a 40% margin can correspond to a 66.67% markup.
Example calculation
Sample values, separate from your calculation:
- Revenue
- $1,000
- Cost
- $600
- Profit
- $400
- Margin
- 40%
- Markup
- 66.67%
Frequently asked questions
What is the difference between profit margin and markup?
Profit margin measures profit as a percentage of revenue. Markup measures the same profit as a percentage of cost, so the two percentages are usually different.
Can a profit margin be negative?
Yes. When cost is greater than revenue, profit is negative and the profit margin is negative. This indicates a loss.
Why is markup undefined when cost is zero?
Markup divides profit by cost. Division by zero is undefined, so a zero cost cannot produce a meaningful markup percentage.
What costs should I include?
Include the costs relevant to the decision you are evaluating. For a product, that may be its direct purchase or production cost. For an overall business margin, use a consistently defined total cost that matches the revenue period.
Can profit margin exceed 100%?
Not when revenue and cost are both nonnegative. With those inputs, the highest possible margin is 100%, which occurs when cost is zero.