Business Intelligence for Indian SMEs

How to Calculate Profit Margin? Formula, Example & Calculator

Profit margin is calculated using this formula:

Profit Margin (%) = (Selling Price - Cost Price) ÷ Selling Price × 100

In simple terms: It tells you what percentage of your sales is actual profit.


Quick Answer: What is Profit Margin?

Profit margin is the percentage of profit you earn from your selling price. It shows how much money you keep after covering all costs.


Profit Margin Formula Explained

Standard Formula

Profit Margin (%) = (Profit ÷ Selling Price) × 100

Where:

  • Profit = Selling Price - Cost Price

Related Search Terms

  • how to find profit percentage
  • profit margin calculation formula
  • gross profit margin formula
  • how to calculate margin in business
  • selling price vs cost price formula

Step-by-Step: How to Calculate Profit Margin

  1. Find your Cost Price (CP)
  2. Determine your Selling Price (SP)
  3. Calculate Profit = SP - CP
  4. Apply formula: (Profit ÷ SP) × 100

Example (India Business Use Case)

  • Cost Price = ₹80
  • Selling Price = ₹150

Profit = ₹70

Profit Margin = 46.67%

Final Answer: Your profit margin is 46.67%


Margin vs Markup

  • Markup = Profit ÷ Cost Price
  • Margin = Profit ÷ Selling Price

👉 Markup vs Margin Explained


Use Free Profit Margin Calculator

👉 Profit Margin Calculator


Advanced: Bulk Calculation

👉 Upload CSV & Calculate in Bulk



FAQs

What is profit margin?

Profit margin is the percentage of profit from your selling price.

How do I calculate profit margin?

(Selling Price - Cost Price) ÷ Selling Price × 100

What is a good profit margin in India?

Retail: 10-30%, Food/Café: 50-70%.

Is margin same as markup?

No. Margin is based on selling price, markup on cost price.

How to increase margin?

Reduce costs, improve pricing, optimize operations.


Start tracking your profit margin to improve pricing and profitability. Calculate Now 👉