What Is the Profit Calculator?
This profit calculator helps you quickly determine how much money your business or product makes. By entering your total revenue (the money received from sales) and your total cost (what you paid to produce or acquire the goods), it instantly computes your net profit, profit margin percentage, and markup. These three numbers are the foundation of pricing, budgeting, and financial analysis for any business.
How to Use It
Enter your total revenue and total cost in the fields above, then submit. The tool returns your profit in dollars along with two key ratios: profit margin (profit as a share of revenue) and markup (profit as a share of cost). Use it to test prices, compare products, or check whether a deal is worthwhile.
The Formula Explained
Profit is the simplest of all business metrics: $$\text{Profit} = \text{Revenue} - \text{Cost}$$ The profit margin shows what fraction of each sales dollar you keep: $$\frac{\text{Revenue} - \text{Cost}}{\text{Revenue}} \times 100$$ The markup instead expresses profit relative to cost: $$\frac{\text{Revenue} - \text{Cost}}{\text{Cost}} \times 100$$ Margin and markup are often confused — margin is always lower than markup for the same sale because revenue is larger than cost.
Worked Example
Suppose you sell an item for $1,000 (revenue) that cost you $600 to make. $$\text{Profit} = 1000 - 600 = \mathbf{400}$$ $$\text{Profit margin} = \frac{400}{1000} \times 100 = \mathbf{40\%}$$ $$\text{Markup} = \frac{400}{600} \times 100 \approx \mathbf{66.67\%}$$ So you keep 40 cents of every sales dollar, marking the product up by two-thirds over its cost.
FAQ
What is the difference between margin and markup? Margin is profit divided by revenue; markup is profit divided by cost. The same dollar profit gives a higher markup percentage than margin percentage.
Can profit be negative? Yes. If your cost exceeds your revenue, profit (and margin) will be negative, indicating a loss.
Is this gross or net profit? It depends on which costs you enter. Include only product costs for gross profit, or all operating expenses for net profit.
