**Profit Margin ﹣ Calculator**

The **Margin Calculator** is used to calculate the margin trading, gross margin (profit margin or trade margin), the absolute margin, the markup percentage, and the relative markdown margin, as well as costs, revenues, and many other key figures. Based on the last two entries you input, all the other relevant figures related to the margin trading are calculated.

## The Most Important Topics on the Margin Calculator

## Contents

### Costs (cost price)

Please enter the cost or cost price. You can therefore enter the purchase price or the manufacturing price here in order to calculate the margin or gross margin. In addition to the pure purchase or production costs, costs that can be allocated proportionately, such as labor costs or lease, can also be added to the costs. The following applies:

#### Formula for costs

**Revenue − Margin = Costs**

### Markup in % (calculation markup)

Please enter the desired markup on the costs as a percentage. This markup, also called calculation markup, markup margin, or markup range, looks at the calculation "from the bottom up" and asks: What percentage of the costs is added to them to arrive at the revenue or sales price? Or also: What percentage of the costs corresponds to the margin?

#### Formula for markup

**(Revenues − Costs) * 100 / Costs = Markup in Percentage**

#### Example for the calculation of the markup

With a cost of 450 and a markup of 10 percent, the sales are 495 , because 10 percent of 450 is 45 . The sum of costs and markup finally forms the revenue of 495 . And here is the example calculation using the formula for the markup: (495 − 450 ) * 100 / 450 = 10%

### Margin in (or other currencies)

Please enter the margin in . The margin is the difference between the costs and the revenue, i.e., the margin between the purchase price and the sales price. It therefore applies as follows:

#### Formula for margin

**Revenue − Costs = Margin**

#### Example of the calculation of the margin

With a total cost of 450 and a revenue of 500 , the margin is 50 .

### Margin in % (Gross Margin)

Please indicate the margin in percent. In contrast to the markup in percent, the margin in percent, often called the gross margin, takes a view "from above": What percentage of the revenue is the difference between costs and revenue? It is therefore often also called the markdown margin or markdown range. As a result, one might wonder: What percentage of revenue does the margin correspond to?

#### Formula for margin in percent or formula for gross margin (markdown margin)

**(Revenue − Costs) * 100 / Revenue = Margin in percent (Gross Margin)**

#### Example of the calculation of the margin in percent

With a revenue of 500 and a margin of 10%, the cost is 450 , because 10% of 500 is 50 . And here is the example calculation using the formula for the margin: (500 − 450 ) * 100 / 500 = 10%

### Revenue

Please enter the revenue. So, please enter the sales price or turnover to calculate the margin or gross margin. It therefore applies as follows:

#### Formula for the revenue

**Costs + Margin (gross margin) = Revenue (sales price)**

### How is the absolute margin calculated?

The absolute margin is the actual margin in (or other currencies) that a company earns per product or service sold. It is calculated by subtracting the costs from the revenue or sales. The formula is:

**Absolute Margin = Revenue - Costs**

Example: A company sells a product for 100 . The manufacturing cost is 60 . The absolute margin is 100 - 60 = 40 . The company thus achieves an absolute margin of 40 per product sold.

### How is the relative margin calculated?

The markup percentage indicates the percentage share of the margin trading in the revenue. It is calculated by dividing the absolute margin by the revenue and multiplying the result by 100. The formula is:

**Markup Percentage = (Absolute Margin / Revenue) x 100%**

Example: The company from the above example has a revenue or sales of 1000 . The markup percentage is (40 / 100) x 100% = 40%. The company therefore has a markup percentage of 40%, which means that 40% of sales remains after all costs have been deducted.

## More online calculators

## Source information

As source for the information in the 'Profit Margin' category, we have used in particular:

## Last update on March 14, 2023

The last changes in the 'Profit Margin' category were implemented by Stefan Banse on March 14, 2023. The main changes were:

- 13.03.2023: Publication of the Margin Calculator together with associated texts.
- Editorial revision of all texts in this category