Profit Margin & Markup Calculator
Calculate gross profit, gross profit margin, and markup percentage from your cost of goods sold and selling price.
Pricing Inputs
Gross Profit
$40
Revenue minus cost of goods sold
Gross Profit Margin
40.0%
Profit as a percentage of revenue
Markup Percentage
66.7%
Profit as a percentage of cost
Margin vs. Markup
Profit Margin
40.0%
Measures profit relative to selling price. Used to evaluate how much of each dollar earned is profit.
Markup
66.7%
Measures profit relative to cost. Used to set prices by adding a percentage on top of cost.
How the Profit Margin & Markup Calculator Works
This calculator takes your cost of goods sold (COGS) and selling price to compute three key metrics: gross profit in dollars, gross profit margin as a percentage of revenue, and markup as a percentage of cost. These metrics help you evaluate pricing strategies and compare profitability across products.
Profitability Formulas
Margin vs. Markup: What is the Difference?
Margin and markup are both profitability metrics, but they measure profit relative to different bases. Understanding both is essential for pricing products correctly and communicating with suppliers and investors.
Profit Margin
Margin expresses profit as a percentage of the selling price. A 40% margin means 40 cents of every dollar in revenue is profit. Margin is the standard metric for reporting profitability in financial statements.
Markup
Markup expresses profit as a percentage of cost. A 40% markup means you add 40% to the cost to arrive at the selling price. Markup is commonly used by retailers to set prices based on wholesale cost.