Profit Margin Calculator
Calculate gross profit, net profit, and markup percentage
Product Margin
₹
Total cost to produce or acquire
₹
Price at which you sell to customers
Business Profit
₹
Total sales/income
₹
All operational costs
Product Metrics
Gross Profit (per unit)
₹500
Profit Margin
33.33%
Markup
50.00%
Margin Health: Excellent
Business Performance
Total Revenue₹1,00,000
Total Expenses₹70,000
Net Profit₹30,000
Net Profit Margin30.00%
Business Health: Excellent
Formula Reference
Gross Profit
Selling Price - Cost Price
= ₹1500 - ₹1000 = ₹500
Gross Profit Margin
(Gross Profit ÷ Selling Price) × 100
= (₹500 ÷ ₹1500) × 100 = 33.33%
Markup %
((Selling - Cost) ÷ Cost) × 100
= ((₹1500 - ₹1000) ÷ ₹1000) × 100 = 50.00%
Net Profit Margin
(Net Profit ÷ Revenue) × 100
= (₹30,000 ÷ ₹1,00,000) × 100 = 30.00%
Pricing Scenarios:
For 20% margin:₹1,250
For 30% margin:₹1,429
For 40% margin:₹1,667
For 50% margin:₹2,000
Understanding Profit Metrics
Profit Margin vs Markup:
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost price. A 50% markup equals a 33.3% margin!
Gross Profit:
Revenue minus cost of goods sold (COGS). Doesn't include operating expenses like rent, salaries, marketing.
Net Profit:
The "bottom line" after ALL expenses. This is your actual take-home profit. Net margin shows overall business efficiency.
Pricing Best Practices
- •Know ALL your costs: materials, labor, overhead, packaging, shipping
- •Research competitor pricing before setting your margins
- •Different products can have different margins based on demand
- •Premium brands typically have 50%+ margins, budget brands 10-20%
- •Factor in discounts, returns, and payment processing fees
- •Review margins quarterly and adjust based on market conditions