Calculate profit margin, markup, and profit from a revenue amount and the costs you want to include. Enter two nonnegative dollar amounts to compare the results side by side. This free profit margin calculator also shows the sales revenue needed to break even at the entered cost. Knowing the difference between margin and markup helps you price products, evaluate a project, and compare profitability without confusing two percentages that have different denominators.
## Profit and profit margin formula. Profit equals revenue minus costs. Profit margin is that profit divided by revenue, multiplied by 100. For example, if a store receives $10,000 in revenue and spends $7,000 on costs, its profit is $3,000 and its margin is $3,000 ÷ $10,000 × 100 = 30%. A 30% margin means that 30 cents of each revenue dollar remain after the costs you included. It does not automatically mean 30 cents of net earnings: that depends on whether operating expenses, interest and taxes were included.
## Markup has a different denominator. Markup is profit divided by cost, not revenue. In the same $10,000 revenue and $7,000 cost scenario, markup is $3,000 ÷ $7,000 × 100 = approximately 42.86%. This is why a 30% profit margin is not a 30% markup. To set a sale price from a desired margin of m, use price = cost ÷ (1 − m), where m is a decimal less than 1 and the cost is positive. For a desired 30% margin on a $70 item, the price is $70 ÷ 0.70 = $100.
## Gross, operating, and net profit margin. This two-field calculator does not guess which cost categories you mean. If you enter only the direct cost of goods sold, the result is a gross margin. If you enter all costs, including selling, administration, finance and applicable taxes, the result can be interpreted as a simplified net margin. The difference matters, especially when comparing businesses with different overhead. The calculator does not automatically retrieve prices, fees, tax rates, payroll, accounting rules or sector benchmarks.
Profit, margin percentage, markup, and break-even revenue
Profit = Revenue − Cost
Profit margin (%) = (Profit ÷ Revenue) × 100, if Revenue > 0
Markup (%) = (Profit ÷ Cost) × 100, if Cost > 0
Break-even revenue = Cost (for the stated fixed cost total)
Revenue is total sales earned in the measured scope, and cost is the amount you chose to include. Zero denominators make percentage ratios undefined. A negative profit represents a loss.
A shop has $10,000 in revenue and $7,000 in total costs. Find its profit, margin, markup and break-even revenue.
Result: Profit = $3,000; profit margin = 30%; markup ≈ 42.86%; break-even sales = $7,000.
Subtract total costs from revenue to find profit, then divide the profit by revenue and multiply by 100. With $10,000 revenue and $7,000 costs, the margin is 30%.
Profit margin divides profit by revenue. Markup divides profit by cost. $3,000 profit on $7,000 costs and $10,000 sales is a 30% margin but about 42.86% markup.
Divide cost by 1 − 0.30 = 0.70. If an item costs $70, selling for $100 achieves a 30% margin before additional expenses.
It depends on the costs you enter. Include only direct production or goods costs for a gross margin. Include all relevant expenses for a simplified net margin calculation. The tool does not add expense categories automatically.
Yes. A negative profit margin means costs exceed revenue. For $50 revenue and $60 costs, profit is −$10 and margin is −20%.
Profit remains revenue minus cost. Margin is undefined if revenue is zero; markup is undefined if cost is zero. The calculator labels these cases instead of dividing by zero.
For the fixed total cost amount entered, break-even occurs when revenue equals that cost. Variable fees or additional expenses can change the actual break-even point.