Revenue (₹) Enter your total income from sales in rupees

Cost (₹) Enter your total cost of goods sold in rupees

Quick Examples:

Standard Retail Sale Loss Scenario

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This calculator is for educational purposes only. It is not intended to provide financial advice. Consult a financial advisor for personalized guidance.

What Is Profit Margin

Profit margin tells you how much profit you make for every rupee of sales. It shows the part of your revenue that is left after paying for the cost of goods. A higher margin means you keep more money from each sale. A lower or negative margin means your costs are eating into your earnings.

How Profit Margin Is Calculated

Formula

First, you subtract the cost from the revenue to find the profit. This tells you how much money you actually made. Then, you divide that profit by the total revenue. This step shows what fraction of your sales is profit. Finally, you multiply by 100 to turn that fraction into a percentage. This makes the number easy to read and compare with other products or time periods.

Why Profit Margin Matters

Knowing your profit margin helps you see if your business is making money or losing it. It is a quick way to check the health of each product or service you sell.

Why Profit Margin Is Important for Business Health

If you do not track your profit margin, you may not notice that your costs are rising faster than your sales. A shrinking margin may lead to losses over time, even if your total sales look good. Checking this number regularly may help you spot problems early and make changes before they grow.

For Pricing Decisions

When setting prices, knowing your margin helps you find a selling price that covers costs and leaves room for profit. You may consider testing different prices to see how they change your margin without driving away customers.

For Cost Control

If your margin is lower than you want, you may look at ways to lower your costs. Finding cheaper materials or reducing waste may help improve your margin without needing to raise prices.

Profit Margin vs Markup

Profit margin and markup are often mixed up, but they measure different things. Margin is profit as a share of revenue. Markup is profit as a share of cost. For example, an item that costs ₹700 and sells for ₹1,000 has a 30% margin but a 42.86% markup. Using the wrong number when setting prices may lead to unexpected losses.