Profit Margin Calculator
Enter your revenue, the direct cost of what you sold, and your operating costs. You get gross and net margin, markup on cost and the revenue you need to break even.
Net profit margin
50.0%
Net profit ₹2,50,000
- Gross profit
- ₹3,50,000
- Gross margin
- 70.0%
- Markup on cost
- 233.3%
- Break-even revenue
- ₹1,42,857
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- Margin is profit as a share of revenue. Markup is profit as a share of cost, so the same sale shows a higher markup than margin.
Margin and markup are not the same thing
Gross profit is revenue minus the direct cost of what you sold. Net profit also subtracts operating costs such as rent, salaries and software.
Margin is profit as a share of revenue. Markup is profit as a share of cost. A product that costs ₹60 and sells for ₹100 has a 40% margin but a 66.7% markup.
Break-even revenue here is your operating costs divided by your gross margin: the sales at which gross profit exactly covers operating costs.
The formula
Gross margin = (revenue − COGS) ÷ revenue × 100. Net margin = (revenue − COGS − operating costs) ÷ revenue × 100. Markup = (revenue − COGS) ÷ COGS × 100.
Common questions
What is the difference between gross margin and net margin?
Gross margin only removes the direct cost of what you sold. Net margin also removes operating costs, so it shows what is left after running the business.
How do I calculate markup?
Divide the profit on an item by its cost and multiply by 100. For a cost of ₹60 and a price of ₹100, markup is (100 − 60) ÷ 60 × 100 = 66.7%.
What is a good profit margin?
It depends on the business and the industry, so compare with similar businesses rather than a single number. Track your own margin over time to see whether it is improving.
Does this include tax?
No. It stops before tax and interest. Use your accountant's figures for tax.
Keep your costs in one place
SparkyExpenses tracks expenses, receipts and budgets for small businesses and teams, so the numbers behind a margin or a break-even are the real ones.
Try SparkyExpenses (opens in a new tab)