Profit Margin Calculator
Calculate gross and net profit margins.
Enter values to see the result.
Profit margin - key business metric
Profit margin is a percentage indicator showing what share of revenue represents profit. Gross margin shows the efficiency of production or procurement, while net margin includes all operating costs. High margin means the company efficiently manages costs and can reinvest profit into growth.
Margin vs markup - differences
There's often confusion between margin and markup. Markup is the percentage by which the purchase price is increased to get the selling price. Margin, on the other hand, is the percentage of profit in the selling price. With 50% margin and 100% markup we achieve the same financial result, but calculations differ. It's important to understand this difference when setting prices.
Pricing strategies and margin maximization
To maximize margin, it's worth analyzing cost structure and looking for optimization areas. Strategies such as product differentiation, building a premium brand, or selling additional services can allow raising prices without losing customers. It's also important to regularly monitor margin and compare it with industry benchmarks.