๐ฐ Financial
Margin Calculator
Calculate your gross profit margin based on cost and revenue. Margin represents the percentage of sales revenue that translates into actual profit.
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Formula
Gross Margin = ((Revenue - Cost) / Revenue) ร 100Revenue- The selling price of the product
Cost- The cost of goods sold (COGS)
Gross Margin- The percentage of the selling price that is profit
Example
Calculating Profit Margin
You buy a product from a supplier for $60 and sell it for $100.
- Calculate Gross Profit: $100 - $60 = $40.
- Divide profit by revenue: $40 / $100 = 0.40.
- Convert to percentage: 0.40 ร 100 = 40% Gross Margin.
Frequently Asked Questions
Margin is profit divided by revenue. Markup is profit divided by cost. If you buy for $50 and sell for $100, your Margin is 50%, but your Markup is 100%. Margin can never exceed 100%, but markup can.