How Profit Margin is Calculated

This calculator helps you determine three key financial metrics:

1. Profit (in ₹)

2. Profit Margin (%)

3. Markup Percentage (%)

Formulas Used:

Metric	Formula	Description
Profit	Selling Price - Cost Price	The actual amount earned after deducting costs
Profit Margin (%)	(Profit / Selling Price) × 100	The percentage of profit relative to revenue
Markup (%)	(Profit / Cost Price) × 100	The percentage added to cost to determine selling price

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Example Calculation (Using Indian Rupees – ₹)

Let’s assume:

• Cost Price (CP) = ₹500

• Selling Price (SP) = ₹800

Step-by-Step Calculation:

1. Calculate Profit:

   $$\text{Profit}=\text{SP}-\text{CP}=₹800-₹500=₹300$$

2. Calculate Profit Margin (%):

   Profit Margin=(ProfitSP)×100=(₹300₹800)×100=37.5%Profit Margin=(SPProfit)×100=(₹800₹300)×100=37.5%

3. Calculate Markup (%):

   Markup=(ProfitCP)×100=(₹300₹500)×100=60%Markup=(CPProfit)×100=(₹500₹300)×100=60%

Result Summary:

Metric	Value
Profit	₹300
Profit Margin	37.5%
Markup	60%

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What Do These Numbers Mean?

 Profit (₹300): You earn ₹300 per item sold after covering costs.
 Profit Margin (37.5%): 37.5% of your selling price is profit.
 Mark-up (60%): You priced the product 60% above its cost.