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Margin Calculator

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Margin calculator

Enter any two of cost, revenue, profit or margin. The other two are solved instantly — along with the equivalent markup and a live split of where your revenue goes.

Enter any two values

The other two are calculated

Target margin

Margin

—

Markup

—

Profit

—

Revenue

—

Fill in any two fields above — for example a cost and a target margin — to see the full breakdown.

What is a profit margin?

Margin is the share of revenue you keep as profit once the cost of the goods is paid. Because it is a percentage rather than an amount, it tells you how efficient a sale was — not just how big it was.

Cost
What the goods cost you — the cost of goods sold.
Revenue
What the customer pays you. Your selling price.
Profit
Revenue minus cost. What is actually left over.

A worked example

You buy something for ₹30 and sell it for ₹50. Here is the whole calculation, line by line.

Cost of goods sold₹30.00
Revenue (selling price)₹50.00
Profit = ₹50 − ₹30₹20.00
Margin = 100 × 20 ÷ 5040%
Markup = 100 × 20 ÷ 3066.67%

The formulas

Two relationships drive everything. Rearranged, they solve for whichever value you are missing — which is exactly what the calculator does.

  • margin=100 × profit ÷ revenue
  • profit=revenue − cost
  • revenue=100 × profit ÷ margin
  • revenue=cost ÷ (1 − margin ÷ 100)
  • cost=revenue − (margin × revenue ÷ 100)

Pricing shortcut

To hit a target margin, divide your cost by 1 − margin. These are the numbers you will reach for most often.

Target marginDivide cost byExample
10%0.90₹100 → ₹111.11
20%0.80₹100 → ₹125.00
30%0.70₹100 → ₹142.86
40%0.60₹100 → ₹166.67
50%0.50₹100 → ₹200.00

Margin vs. markup

The two are constantly mixed up, and confusing them means mispricing. Both describe the same profit against a different base.

MarginMarkup
Measured againstThe selling price (revenue)The cost you paid
Formula100 × profit ÷ revenue100 × profit ÷ cost
Upper limitCan never exceed 100%No upper limit
₹30 cost, ₹50 price40%66.67%
Used forJudging profitabilitySetting prices from cost

What counts as a good margin?

It varies enormously by industry, so treat this as orientation rather than a target — and compare against the norm for your own sector.

5%

Thin

A small cost rise wipes it out.

10%

Average

A workable baseline for most businesses.

20%

Healthy

Room to reinvest and absorb shocks.

Frequently asked questions

What's the difference between gross and net profit margin?
Gross profit margin divides gross profit by revenue — the raw money made on the goods themselves. Net profit margin subtracts every other expense first (rent, wages, taxes, and so on) before dividing by revenue. This calculator works out gross margin. Investors usually pay more attention to net margin, because it reflects what the business actually keeps.
How do I calculate a 20% profit margin?
Express the margin as a decimal (0.2), subtract it from 1 to get 0.8, then divide your cost by 0.8. A ₹40 cost becomes a ₹50 price. The quick reference table above does this for the common targets.
What is a good margin?
There is no single answer — it depends heavily on your industry. As a rough guide, 5% is thin, 10% is about average and 20% is healthy. The important things are to stay above zero and to compare yourself against the norm for your own sector rather than against businesses selling something quite different.
Can a profit margin be too high?
Chasing the highest possible margin can backfire. Money left in the business — better products, better people, better service — usually compounds faster than money taken out. Some ways of raising short-term margin, such as cutting quality or support, cost far more later in lost customers.
Are margin and profit the same thing?
No. Profit is an absolute amount in rupees, so it tells you the size of the win. Margin is a percentage, so it tells you how efficient the win was and can be compared fairly across deals of very different sizes. Watch both.
What is margin in sales?
The selling price of a product or service minus everything it took to get it sold, expressed as a percentage of that selling price. Depending on how you account for it, that can include discounts given, materials, manufacturing, salaries and rent.

Margins are easier to defend when you can see every deal.

SalesLyt keeps your pipeline, quotations and invoices in one place, so the numbers you report are the numbers your team actually sold.

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