Profit Margin Calculator
Calculate gross profit margin percentage, dollar profit, markup on cost, and revenue-to-cost multipliers from gross sales and expenditure totals.
Revenue vs Total Cost
Profit Margin & Markup Formulas
Profit Margin % = ((Revenue - Cost) / Revenue) × 100; Markup % = ((Revenue - Cost) / Cost) × 100- Gross Margin %: Percentage of every revenue dollar retained as profit after covering costs.
- Markup on Cost %: Percentage added on top of the original purchase cost.
- Break-Even Factor: Ratio of revenue to costs (must be greater than 1.0 to achieve profitability).
Step-by-Step Worked Example
Calculation Steps:
- Gross Profit = $1,000 - $750 = $250
- Profit Margin = ($250 / $1,000) × 100 = 25.0%
- Markup on Cost = ($250 / $750) × 100 = 33.3%
- Break-Even Multiplier = $1,000 / $750 = 1.33x
How to Use This Calculator
- 1Enter total revenue generated from sales.
- 2Enter the total cost associated with generating that revenue.
Assumptions & Limitations
- Total cost can represent COGS or fully loaded expenses depending on whether you are analyzing gross or net margin.
Frequently Asked Questions
Can profit margin ever exceed 100%?
No. Since profit margin is profit divided by revenue, and profit cannot exceed revenue (unless costs were magically negative), profit margin can never reach or exceed 100%.
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