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Profit Margin Calculator

Calculate profit, profit margin, markup and cost ratio using your business revenue and costs, with a clear breakdown of every result.

Profit Margin Calculator

Profit Margin Calculator — The Merchant Explorer’s Ledger
Revenue and cost information

Total amount received before subtracting costs.

Costs associated with producing the entered revenue.

Profit Margin Results

PROFIT

$87,500.00

Revenue exceeds costs by $87,500.00.

Revenue

$250,000.00

Total Costs

$162,500.00

Status

Profitable

Profit Margin

35.00%

Cost Ratio

65.00%

Markup

53.85%

For Every $100 Received

$65.00 covers costs $35.00 remains as profit

The Merchant’s Reading

With $250,000.00 received and $162,500.00 spent, the enterprise produces an estimated profit of $87,500.00. The resulting profit margin is 35.00%, while costs account for 65.00% of revenue. The corresponding markup on cost is approximately 53.85%.

How this tool works

Enter the total amount of money your business received (revenue) and the total costs associated with earning that revenue.

The calculator subtracts costs from revenue to estimate your profit. It then calculates your profit margin, cost ratio, and markup to help you understand the relationship between revenue, expenses, and profitability.

Profit = Revenue − Total Costs

Profit Margin = (Profit ÷ Revenue) × 100

Cost Ratio = (Total Costs ÷ Revenue) × 100

Markup = (Profit ÷ Total Costs) × 100

The calculator also shows how much of every $100 in revenue goes toward costs and how much remains as profit.

A positive profit indicates that revenue exceeds costs. A negative profit indicates a loss. Results involving division by zero may be unavailable when revenue or costs are zero.

For meaningful results, include all relevant business costs, such as production, operating expenses, and other applicable expenses. Excluding costs can make the estimated profit and profit margin appear higher than they actually are.

This calculator provides simplified estimates for educational and business planning purposes. It does not replace professional accounting, tax, or financial advice.

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