Free tool

Profit margin calculator

Margin and markup describe the same profit from two sides. Enter a cost and a price, or a cost and the margin you want, and the sheet does the rest.

fx=B4/B3

	A	B
1	From cost and price
2	Cost
3	Selling price
4	Profit	20.00
5	Margin	40%
6	Markup	66.67%
7
8	Price for a target margin
9	Cost
10	Margin you want (%)
11	Selling price	50.00
12
13	Price for a markup
14	Cost
15	Markup (%)
16	Selling price	45.00
17	That is a margin of	33.33%

Blue cells are inputs: type a new value and the sheet recomputes. Click a result to see its formula.

The formulas

How it works, step by step

=(B3-B2)/B3

Margin. Profit divided by the selling price. Selling at 50 something that cost 30 leaves 20 profit, a 40% margin: 40 cents of every sale is profit.

=(B3-B2)/B2

Markup. Profit divided by the cost. The same 20 on a cost of 30 is a 66.7% markup. Markup is always higher than margin for the same sale.

=B9/(1-B10/100)

Price for a target margin. Divide the cost by (1 − margin). For a 40% margin on a cost of 30: 30 / 0.6 = 50. Adding 40% to the cost (42) would only give a 28.6% margin, the usual pricing mistake.

=B14*(1+B15/100)

Price for a markup. Multiply the cost by (1 + markup): a 50% markup on 30 is 45, which is a 33.3% margin.

Functions used here

ROUNDRound to N decimals SUMSum of values SUMPRODUCTSum of element-wise products AVERAGEMean of values

More free tools

Percentage calculatorWork out a percent of a number, what percent one number is of another, and the percent change between two values, with the spreadsheet formula for each.Credit card interest calculatorSee the interest on a credit card balance this month, how many months your payment takes to clear it, and the total interest, with the formulas behind each number.Cubic feet calculatorCalculate cubic feet from length, width and height in feet or inches, convert to cubic yards and cubic meters, and get the volume of a cylinder, with the formulas.Box and whisker plot makerPaste your numbers to draw a box and whisker plot with the minimum, quartiles, median, maximum, IQR and outliers, each worked out by a spreadsheet formula you can copy.Find duplicates in a listPaste a list to flag every duplicate, count the distinct values and list the ones that repeat, with the COUNTIF and UNIQUE formulas that do it in any spreadsheet.Multiply columns and add them upMultiply quantity by price on each row, sum the column, and get the same total in one SUMPRODUCT formula.CAGR calculatorWork out the compound annual growth rate between a start and end value over any number of years, check it with RRI, and project future values with the same rate.

FAQ

Questions

How do I calculate profit margin?

Subtract the cost from the selling price and divide by the selling price. Cost 30, price 50: (50 − 30) / 50 = 40% margin.

What is the difference between margin and markup?

Margin is profit as a share of the price; markup is profit as a share of the cost. A product that costs 30 and sells for 50 has a 40% margin and a 66.7% markup.

How do I set a price for a 40% margin?

Divide the cost by 0.6 (that is 1 − 40%). A cost of 30 needs a price of 50. Multiplying the cost by 1.4 gives 42, which is only a 28.6% margin.

How do I convert markup to margin?

Margin = markup / (1 + markup). A 50% markup is 0.5 / 1.5 = 33.3% margin. The other way round, markup = margin / (1 − margin).

Should the cost include shipping and fees?

For gross margin, use the cost of the goods sold: purchase price plus what it takes to get the product ready to sell. Payment fees, shipping and marketing usually come out later, in the net margin.

Run these formulas on live data

Sheets is a spreadsheet with 491 functions that reads your store, accounting or project data live, builds dashboards and e-mails reports on a schedule.

See the integrations All free tools