About margin calculator
Margin tells you what portion of revenue is profit. It is used to compare products and judge pricing.
Formula
Margin % = (revenue − cost) ÷ revenue × 100. Revenue ₹500 with cost ₹350 gives a 30% margin.
Margin vs markup
Markup is profit as a share of cost, so the same sale is a 42.9% markup (150 ÷ 350) but a 30% margin. Mixing them up leads to underpricing.
A worked example
A product sells for ₹1,200 and costs ₹900 to make. The profit is ₹300, so the margin is 25 percent. The same sale is a 33.3 percent markup, since 300 is a third of 900.
Setting a target
- To earn a 30 percent margin on a ₹700 cost, divide by 0.7 to get a price of ₹1,000.
- Do not get this wrong by multiplying cost by 1.3, which gives only ₹910 and a 23 percent margin.
