Profit margin & markup
Understand the difference between margin and markup.
Gross profit margin
For illustration only. Read the assumptions below for the full picture.
Understand your result.
Calculate gross, operating or net profit margin from comparable revenue and cost figures. Markup is shown separately because it uses cost, rather than revenue, as the denominator.
A 40% margin and a 40% markup are not the same. Choose the cost scope that matches the type of profit you want to measure.
A worked example.
Using this calculator’s default inputs, gross profit margin is 40%. This is an illustration of the stated formula, not a forecast.
See the example inputs
| Cost / expenses | ₹60,000 |
|---|---|
| Sales / revenue | ₹1,00,000 |
| Type of costs entered | Product cost — gross margin |
A common mistake to avoid
Including output GST in sales while excluding recoverable GST from costs.
Questions you might have.
Can the margin be negative?
Yes. Costs above revenue produce a loss and a negative margin.
Does this calculate stock-trading margin?
No. It describes business profitability, not borrowing limits, leverage or exchange margin requirements.
Prepared by INDwise · Calculation checks: 29 October 2026 · How we check the maths · Report a correction
How we calculate it
Profit = revenue − entered costs. Margin = profit ÷ revenue × 100. Markup = profit ÷ cost × 100 when cost is positive.
Assumptions & things to know
Enter comparable amounts for the same product or accounting period. Exclude recoverable GST from cost and output GST from revenue. Operating costs should include cost of sales; net costs should include all relevant expenses. This is business profit margin, not leveraged trading margin.
Your privacy & sharing
Your financial inputs are used only within this page. Saved calculators use this browser’s local storage. Sharing creates a link with the entered values, so anyone with that link can see those values. A downloaded summary stays on your device.