Profit Margin Calculator

How to Calculate Profit Margin

Profit margin tells you what percentage of your revenue remains as profit after subtracting the cost used in the calculation. To calculate it, divide profit by revenue and multiply by 100.

Profit Margin Formula

Profit Margin (%) = (Profit ÷ Revenue) × 100

Example

Suppose a product costs ₹1,400 and generates ₹2,000 in revenue.

• Revenue: ₹2,000
• Cost: ₹1,400
• Profit: ₹600
• Profit margin: (₹600 ÷ ₹2,000) × 100 = 30%

The profit margin is 30%. This result only accounts for the costs included in the calculation; any additional business expenses must be considered separately.

Profit Margin vs. Markup

Profit margin and markup both measure profit, but they use different values as the base for the calculation.

• Profit margin: Measures profit as a percentage of revenue.
• Markup: Measures profit as a percentage of cost.

Both figures describe the same ₹400 profit, but express it differently. AtraKit Profit Margin Calculator calculates margin based on revenue, rather than markup based on cost.

What Is a Good Profit Margin?

A good profit margin depends on the type of business, its operating costs, pricing, and industry. A margin that works well for one business may not be enough for another. There is no single percentage that is ideal for every business.

When evaluating your profit margin, consider the costs involved in providing your product or service, along with expenses such as rent, salaries, shipping, marketing, and taxes where applicable. These expenses can affect how much profit remains.

Use the Profit Margin Calculator above to work out your margin and understand how much profit remains relative to revenue.

What Is the Difference Between Revenue, Cost, and Profit?

Revenue, cost, and profit describe different parts of a financial calculation. Understanding how they relate makes it easier to calculate profit margin and review your business results.

In AtraKit calculator, profit is calculated as revenue minus cost. The result depends on which costs you include, so it may not represent your final profit after every business expense.

How to Use the Profit Margin Calculator

Use AtraKit's Profit Margin Calculator to work out profit, revenue, cost, or profit margin using the figures you already know. Enter any two values to calculate the remaining ones and review your results.

The result depends on the values you enter. Include relevant expenses in the cost amount if you want them reflected in the profit and margin calculation.