Finance
Margin Calculator
Calculate gross margin, markup percentage, cost of goods sold, and profit based on selling price and product cost.
About This Tool
Use this margin and markup calculator to determine gross profit margins, markups, cost of goods sold, and suggested selling prices. Switch between Cost & Price, Cost & Margin, or Cost & Markup to find the exact pricing numbers for your products.
Margin & Markup Formulas
Gross Margin % = ((Revenue - Cost) / Revenue) × 100Gross profit is selling price minus product cost. Markup percentage is calculated as (Gross Profit / Cost) × 100.
Examples
Calculate Margin from Cost and Price
Cost: $40, Selling Price: $60
Result: Gross profit of $20. Gross margin of 33.33%, markup of 50%.
Calculate Price from Target Margin
Cost: $50, Target Margin: 40%
Result: Suggested selling price of $83.33, yielding $33.33 profit.
FAQ
What is the difference between margin and markup?
Margin is the ratio of profit to the selling price (revenue), while markup is the ratio of profit to the cost of goods sold. For example, if an item costs $10 and sells for $15, the markup is 50% ($5 profit on $10 cost), but the margin is 33.3% ($5 profit on $15 revenue).
Can gross margin be negative?
Yes. If the cost of goods sold exceeds the selling price, the business incurs a loss, which results in a negative gross profit and a negative margin.
Is markup percentage always higher than margin percentage?
Yes, for any profitable item, the markup percentage will always be higher than the gross margin percentage because markup is calculated relative to a smaller base (the cost) rather than the selling price.
Important Note
Results are estimates for planning and education. They do not replace financial, tax, legal, or professional advice. Review assumptions before making decisions.