Profit Margin Calculator

Profit margin answers the most basic business question: of every rupee a customer pays you, how much do you keep? Margin = (revenue − cost) ÷ revenue. Sell for ₹1,000 what costs you ₹700 and your margin is 30% — thirty paise of every rupee of sales is gross profit, available to pay overheads and leave a net profit.

Margin is routinely confused with markup, and the confusion costs money. Markup measures profit against cost: the same ₹300 profit on a ₹700 cost is a 42.9% markup but only a 30% margin. A shopkeeper who wants a '30% margin' and adds 30% to cost actually ends up with a 23% margin. This calculator shows both figures side by side so the distinction is always visible; if you think in markup terms, use the dedicated markup calculator, which works from cost and price.

Track margin at two levels: per product, to decide what to promote, reprice or drop; and blended across the business, to watch the trend — a slowly eroding margin usually means input costs are creeping up faster than your prices. Typical gross margins vary hugely by industry: grocery retail runs on 15–25%, apparel 40–60%, restaurants 60–70% on food (before heavy fixed costs), and software much higher. Compare yourself with your industry, not with a universal number.