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Business & Accounting

Profit Margin Calculator

Calculate the profit margin from cost and price, or the selling price needed to hit a target margin, with the equivalent markup.

Your inputs

Results

Profit margin

40%

Profit per unit
$40.00
Equivalent markup on cost
66.667%

✓Exact calculation — rounded only for display

What this calculator does

Margin is the share of the selling price that is profit. Pricing to a target margin is a common retail and wholesale practice.

Formula and method

Margin = (price − cost) ÷ price; Price for target margin = cost ÷ (1 − margin)

Worked example

Calculated by this tool with its default inputs:

Inputs

  • I know: Cost and selling price
  • Cost: 60 (any currency)
  • Selling price: 100 (any currency)

Results

  • Profit margin: 40%
  • Profit per unit: 40
  • Equivalent markup on cost: 66.667%

How to read the results

Margins near 100 % require prices far above cost; a 50 % margin means doubling the cost.

Assumptions and limitations

  • Use the same cost definition (e.g. landed cost) consistently.

Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.

Questions

Why can margin never reach 100 %?

It would require a zero cost, since margin = 1 − cost ÷ price.

Methodology and verification

Result type
Exact mathematical calculation (rounded only for display)
Formula version
1.0
Automated verification
3 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
Editorial review
Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.

Privacy

Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Inputs are added to a share link only if you choose to include them. Privacy policy