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Profit margin measures profitability as a percentage of the selling price. Gross Margin % = ((Selling Price − Cost) / Selling Price) × 100. Unlike markup (which uses cost as the base), margin uses selling price — making it the standard financial metric.
Margin tells you what fraction of each dollar of revenue is profit. A 40% margin means $0.40 of every dollar of sales is gross profit, and $0.60 covers the cost of goods sold. Higher margins mean more profit per sale.
You can also find the selling price needed to achieve a target margin: Selling Price = Cost / (1 − Margin%). For a $60 cost with a desired 40% margin: $60 / 0.60 = $100 selling price.
Margin % = ((Selling − Cost) / Selling) × 100 | Selling Price = Cost / (1 − Margin%/100)
This calculator is for educational purposes only and does not constitute professional advice. Results are based on standard mathematical formulas. Always verify critical calculations with a qualified professional before making important decisions.