Calculation of margin, markup and business profitability
Calculation of margin, markup and business profitability
Enter parameters for calculation
An online margin calculator will help you calculate the margin, markup and profitability of your business. Supports the calculation of margin on revenue, markup on cost, revenue with a known margin and other financial indicators.
Margin is a profitability indicator that shows the percentage of profit from revenue. Gross Margin = (Revenue - Cost) / Revenue × 100%. Profit margin = (Revenue - All expenses) / Revenue × 100%. Markup = (Revenue - Cost) / Cost × 100%. The calculator takes into account all these indicators and helps you make financial decisions.
Let's look at practical examples of calculating margins for various business situations:
The product is sold for 1000 ₽, cost 600 ₽
Входные данные:
Revenue: 1000 ₽
Cost: 600 ₽Расчёт:
Profit = 1000 - 600 = 400 ₽
Gross Margin = (400 / 1000) × 100% = 40%
Markup = (400 / 600) × 100% = 66.67%Результат:
Margin: 40%, Markup: 66.67%, Profit: 400 ₽
Тип:
Retail
A margin of 40% is considered good for retail. The markup shows how many percent the selling price is higher than the cost.
Cost 500 ₽, desired margin 30%
Входные данные:
Cost: 500 ₽
Margin: 30%Расчёт:
Revenue = 500 / (1 - 0.30) = 500 / 0.70 = 714.29 ₽
Profit = 714.29 - 500 = 214.29 ₽
Markup = (214.29 / 500) × 100% = 42.86%Результат:
Revenue: 714.29 ₽, Profit: 214.29 ₽, Markup: 42.86%
Тип:
Pricing
With a known cost and desired margin, you can calculate the required selling price
The service costs 5000 ₽, cost 1000 ₽
Входные данные:
Revenue: 5000 ₽
Cost: 1000 ₽Расчёт:
Profit = 5000 - 1000 = 4000 ₽
Gross Margin = (4000 / 5000) × 100% = 80%
Markup = (4000 / 1000) × 100% = 400%Результат:
Margin: 80%, Markup: 400%, Profit: 4000 ₽
Тип:
Services
Services usually have high margins, since the cost often consists only of the specialist’s time
The product is sold for 1200 ₽, cost 1100 ₽
Входные данные:
Revenue: 1200 ₽
Cost: 1100 ₽Расчёт:
Profit = 1200 - 1100 = 100 ₽
Gross Margin = (100 / 1200) × 100% = 8.33%
Markup = (100 / 1100) × 100% = 9.09%Результат:
Margin: 8.33%, Markup: 9.09%, Profit: 100 ₽
Тип:
Mass production
In mass production, small margins are compensated by large sales volumes
Revenue 100,000 ₽, cost 60,000 ₽, operating expenses 20,000 ₽
Входные данные:
Revenue: 100,000 ₽
Cost: 60,000 ₽
Operating expenses: 20,000 ₽Расчёт:
Gross profit = 100,000 - 60,000 = 40,000 ₽
Gross Margin = (40000 / 100000) × 100% = 40%
Operating profit = 40,000 - 20,000 = 20,000 ₽
Operating Margin = (20,000 / 100,000) × 100% = 20%Результат:
Gross Margin: 40%, Operating Margin: 20%, Operating Profit: RUB 20,000
Тип:
Full analysis
Operating margin takes into account all operating expenses and shows the real profitability of the business
Product A: revenue 800 ₽, cost 400 ₽. Product B: revenue 600 ₽, cost 300 ₽
Входные данные:
Product A: Revenue 800 ₽, Cost 400 ₽
Product B: Revenue 600 ₽, Cost 300 ₽Расчёт:
Product A: Margin = (400 / 800) × 100% = 50%, Profit = 400 ₽
Product B: Margin = (300 / 600) × 100% = 50%, Profit = 300 ₽
Both products have the same margin of 50%, but product A makes more profit in absolute termsРезультат:
Both products: Margin 50%. Product A: 400 ₽ profit, Product B: 300 ₽ profit
Тип:
Comparative analysis
Given the same margin, the product with higher revenue brings more absolute profit
Margin calculation includes several indicators to assess the profitability of a business.
Различные виды маржи для анализа рентабельности бизнеса:
(Выручка - Себестоимость) / Выручка
(Выручка - Все расходы) / Выручка
(Чистая прибыль / Выручка) × 100%
Нормальные значения маржи для различных отраслей:
20-40%
50-80%
10-30%
70-90%
Расчёт валовой маржи, маржи прибыли и других финансовых показателей для оценки рентабельности бизнеса
Расчёт наценки от себестоимости для определения оптимальной цены продажи товаров и услуг
Анализ прибыли и убытков для принятия обоснованных финансовых решений и оптимизации бизнес-процессов
Расчёт рентабельности (ROI) для оценки эффективности инвестиций и бизнес-операций
Высокая точность расчётов на основе актуальных финансовых формул и методов анализа
Using a margin calculator provides many advantages: accurate calculation of financial indicators, profitability analysis, pricing optimization.
Точный расчёт маржи и наценки по проверенным финансовым формулам с учётом всех особенностей бизнеса
Помогает установить оптимальные цены на основе желаемой маржи, учитывая себестоимость и рыночные условия
Комплексный анализ рентабельности бизнеса для выявления проблем и возможностей оптимизации
Удобный и быстрый расчёт без необходимости изучения сложных финансовых формул и методов
To get an accurate result, follow our recommendations when calculating margins.
Consider all costs in the cost price: raw materials, materials, wages, rent, utilities
Normal margin depends on the industry: retail 20-40%, services 50-80%, manufacturing 10-30%
Set prices based on desired margins, but consider competitors and purchasing power
Regularly monitor margins to identify problems and optimize business processes
Margin is a profitability indicator that shows the percentage of profit from revenue. Gross Margin = (Revenue - Cost) / Revenue × 100%. For example, with revenue of 1000 ₽ and cost of 600 ₽, margin = (400 / 1000) × 100% = 40%.
Margin is calculated from revenue: (Profit / Revenue) × 100%. The markup is calculated based on cost: (Profit / Cost) × 100%. For example, with revenue of 1000 ₽ and cost of 600 ₽, margin = 40%, markup = 66.67%.
Revenue = Cost / (1 - Margin / 100). For example, cost price is 500 ₽, margin 30%: Revenue = 500 / (1 - 0.30) = 500 / 0.70 = 714.29 ₽.
The normal margin depends on the industry: retail trade 20-40%, services 50-80%, manufacturing 10-30%, restaurant business 30-60%. High margins are not always better - absolute profit and sales volume are also important.
Cost = Revenue × (1 - Margin / 100). For example, revenue is 1000 ₽, margin 40%: Cost = 1000 × (1 - 0.40) = 1000 × 0.60 = 600 ₽.
Gross Margin = (Revenue - Cost) / Revenue × 100%. Operating Margin = (Revenue - Cost - Operating Expenses) / Revenue × 100%. Operating margin takes into account all operating expenses and shows true profitability.
Markup = (Revenue - Cost) / Cost × 100%. For example, revenue is 1000 ₽, cost is 600 ₽: Markup = (400 / 600) × 100% = 66.67%.
Business margin is the company's ability to make a profit from sales. High margins mean that the company makes more profit from each unit of sales. This is an important indicator of the financial health of a business.
There are several ways to increase margins: increase prices, reduce costs, optimize business processes, reduce waste, review purchases, and improve production efficiency.
Yes, margins can be negative if costs exceed revenues. This means the business is unprofitable. A negative margin is a signal of serious problems that require immediate solutions.
To calculate the total margin for several products: Total profit = Sum of profits of all products, Total revenue = Sum of revenue, Total margin = (Total profit / Total revenue) × 100%.
Margin is the percentage of profit from revenue: (Profit / Revenue) × 100%. Profitability is a broader concept that includes return on sales, assets, and capital. Margin is one of the types of profitability (return on sales).
Net Margin = (Revenue - Cost - Operating Expenses - Taxes) / Revenue × 100%. Net margin shows the real profitability after paying all taxes and fees.
The cost includes all direct costs of producing a product or providing a service: raw materials, materials, wages of production personnel, depreciation of equipment, energy, rental of production premises.
Break-even point = Fixed costs / Margin in units. Margin in units = Revenue - Variable costs per unit. The break-even point shows the minimum sales volume to cover all expenses.
Retail trade: 20-40%, Wholesale trade: 10-30%, Manufacturing: 10-30%, Services: 50-80%, Restaurant business: 30-60%, IT and software: 70-90%, Construction: 15-35%, Medicine: 30-50%.
For a service, the margin is calculated in the same way: Margin = (Service price - Service cost) / Service price × 100%. The cost of the service includes specialist time, materials, rent, utilities, overhead.
Marginal income = Revenue - Variable expenses. Marginal income shows how much is left to cover fixed costs and make a profit. Contribution Margin per Unit = Price - Variable Cost per Unit.
Optimal price = Cost / (1 - Desired margin / 100). For example, the cost is 500 ₽, the desired margin is 40%: Price = 500 / (1 - 0.40) = 500 / 0.60 = 833.33 ₽.
Theoretically, the margin cannot be more than 100%, since margin = (Revenue - Cost) / Revenue, and cost cannot be negative. However, the markup can be any: with a cost of 100 rubles and revenue of 500 rubles, the markup = 400%.
For an online store, consider all costs: purchase price of the product, delivery, packaging, platform commissions, advertising, payment processing, returns. Margin = (Sales Price - All Costs) / Sales Price × 100%.
The margin is influenced by: the level of competition, elasticity of demand, cost, sales volume, efficiency of business processes, pricing, quality of goods or services, brand, sales channels.
Comparing margins across periods helps identify trends. Calculate the margin for each period and compare the values. Declining margins may indicate rising costs, lower prices, or changes in sales mix.
Margin ratio = Margin / 100. For example, margin 40% = coefficient 0.4. The marginality ratio shows the share of profit in revenue and is used to calculate the break-even point and other financial indicators.
When selling at a discount, the margin is calculated from the sale price at a discount: Margin = (Discount price - Cost) / Discount price × 100%. It is important to consider that discounts reduce margins, but can increase sales.
For dropshipping, margin = (Selling Price - Supplier Price - Shipping Costs - Commissions) / Selling Price × 100%. In dropshipping, margins are usually lower due to the lack of control over purchasing and logistics.
Marginal profitability = (Marginal income / Revenue) × 100%. Marginal profitability shows the share of marginal income in revenue and is used to analyze sales performance.
For production, take into account all production costs: raw materials, materials, wages of production personnel, depreciation of equipment, energy, rent of workshops. Margin = (Sales Price - Production Cost) / Sales Price × 100%.
For a franchise, consider: the cost of the product/service, royalties (monthly percentage of revenue), marketing fees, and other payments to the franchisor. Margin = (Revenue - All payments to the franchisor - Cost) / Revenue × 100%.
Coverage Margin = Revenue - Variable Costs. The coverage margin shows how much is left to cover fixed costs. Coverage margin per unit = Price - Variable costs per unit.