35.00% is the example result. Margin measures the share of selling revenue left after the costs represented here. A 20% margin is not the same as adding 20% to cost.
Profit margin shows the percentage of sales revenue left after the costs you enter. Use this page to review a quote, a product line or a reporting period. Match revenue and cost to the same scope before interpreting the percentage.
Define the profit you are measuring
Subtract the costs entered from revenue, then divide by revenue. A total that contains only direct production costs gives a different result from one that also contains payroll, rent and other operating expenses. State that boundary in your report. The calculator cannot identify missing expenses from the two figures alone.
Use margin to review a price change
A proposed discount changes revenue while much of the delivery cost may remain. Compare the original quote with the discounted quote using the same cost estimate. Review the money left to cover unmodeled expenses as well as the percentage. Margin describes profitability within the figures entered; it does not establish when the customer will pay.
Keep markup separate
Margin divides profit by revenue. Markup divides the same profit by cost. These percentages answer different questions, so do not transfer a markup percentage into a margin target. Zero revenue makes margin undefined. A negative result means the modeled costs exceed revenue; it does not explain which cost needs attention.
Example with the supplied inputs
Revenue: 10000; Total cost: 6500. Result: 35.00%. The values are illustrative.
Compare one changed input
Revenue changes from 10000 to 11000. The result becomes 40.91%. All other inputs remain fixed.
Calculation rule
Margin (%) = (revenue or price − modeled cost) ÷ revenue or price × 100. When EBITDA is supplied, use EBITDA ÷ revenue × 100.
Inputs and output
| Input | Example value | Entry convention |
|---|---|---|
| Revenue | 10000 | Use revenue on the currency and period basis shown by the formula. Keep gross amounts, net amounts and unit amounts distinct; the page does not fetch a price or exchange rate. |
| Total cost | 6500 | Use total cost on the currency and period basis shown by the formula. Keep gross amounts, net amounts and unit amounts distinct; the page does not fetch a price or exchange rate. |
Output: 35.00% is the example result. Margin measures the share of selling revenue left after the costs represented here. A 20% margin is not the same as adding 20% to cost. Use the formula to distinguish a cash amount, count, percentage or ratio.
How to use the page
Collect the inputs
Gather Revenue, Total cost. Use one period and the units shown in the form.
Run the calculation
Enter the values and select the action. The calculation rule above explains how the inputs produce the result.
Compare a scenario
Change Revenue on its own, keeping the other inputs fixed. Read both results before changing another assumption.
Worked example
With the example inputs listed above, the result is 35.00%.
Change Revenue from 10000 to 11000 while keeping every other value fixed. The result becomes 40.91%. This comparison isolates that input; it does not forecast how other variables will respond.
Check the stated formula, units and limits before using the result in a decision.
Keep the displayed formula, input units and model scope with the result. Corrections or questions can be sent through the request section on this page.