Profit Margin Calculator
How to Use the Profit Margin Calculator:
- provide The cost of a product and the Revenue to calculate the rest values.
Profit Margin Calculation Formula
profit margin The profit margin measures how much of every dollar of revenue is actual profit. It’s calculated as:.
Profit Margin (%)=Revenue / Profit×100
Where :
- Profit = Revenue – Cost
- Revenue = Cost + Profit
- Cost = Revenue – Profit
Cost: The cost of a product refers to the total amount spent to create or purchase it. This includes raw materials, manufacturing, labor, and other expenses involved in bringing the product to market.
Revenue: Revenue, also known as sales income, is the total amount of money generated from selling a product or service before any expenses are deducted.
Profit: Profit is the financial gain made when the revenue exceeds the cost of producing and selling the product. It represents the actual earnings your business keeps after covering all expenses.
Margin: Profit margin is a percentage that shows how much profit a business makes compared to its total revenue. A higher margin indicates greater profitability and efficiency.
Markup: Markup is the percentage added to the cost of a product to determine its selling price. It reflects how much more you charge customers compared to what you paid to produce or acquire the product.