Profit & Loss Calculator
Calculate profit or loss, gross margin, and markup from cost and revenue.
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FAQs
What is the difference between gross margin and markup?
Gross margin is profit divided by revenue (selling price). Markup is profit divided by cost. For the same transaction, markup is always higher than gross margin. A 50% markup equals a 33.3% gross margin. Confusing these two is a common and costly business mistake.
What is a healthy gross margin?
Healthy margins vary widely by industry. Retail typically achieves 20–50% gross margin. Software companies often achieve 70–80%+. Grocery stores operate on margins as low as 1–3%. Compare your margin to industry benchmarks rather than a universal standard.
How do I set a selling price to achieve a target margin?
To achieve a target gross margin of X%, set price = Cost ÷ (1 - X/100). For example, to achieve a 40% margin on a $30 cost item: price = $30 ÷ 0.60 = $50. To achieve a 40% markup instead: price = $30 × 1.40 = $42.