Profit Margin Calculator
Instantly calculate your gross profit margin, markup percentage, and cost-to-revenue ratio. Understand the profitability of your products or services and benchmark against industry standards.
API Access
Use this tool programmatically:
curl -X POST https://kappax.io/api/tools/profit-margin-calculator \
-H "Content-Type: application/json" \
-d '{ ... }'See full API documentation for parameters and response format.
Frequently asked questions
What is the difference between profit margin and markup?
Profit margin is the percentage of revenue that remains as profit (profit ÷ revenue × 100), while markup is the percentage added to the cost to arrive at the selling price (profit ÷ cost × 100). For example, buying at $60 and selling at $100 gives a 40% margin but a 66.7% markup.
What is a healthy profit margin?
Healthy margins vary by industry. Software and SaaS companies often see 60–80% gross margins, retail typically ranges from 20–50%, and manufacturing from 10–30%. A margin above 20% is generally considered healthy for most businesses.
How do I calculate gross margin?
Gross margin is calculated as (Revenue − Cost of Goods Sold) ÷ Revenue × 100. For instance, if you sell a product for $100 and it costs $40 to produce, your gross margin is 60%.
Why is cost ratio important?
The cost-to-revenue ratio shows what proportion of your revenue is consumed by costs. A lower ratio means higher profitability. Tracking this metric over time helps identify cost creep and guides pricing decisions.
