Calculator
Enter all monetary amounts in the same currency. The calculator returns ratios and amounts in that same basis.
Gross profit40
Gross margin40%
Markup on cost66.67%
Method and inputs
Formula: gross margin = (price - cost) / price; markup = (price - cost) / cost
Inputs: Selling price and direct cost per item, order or service.
Worked example
At a $100 selling price and $60 direct cost, gross profit is $40, gross margin is 40% and markup is 66.67%.
Important limits
Gross margin is not net profit. Operating expenses, taxes, returns, discounts, financing and overhead are not included unless they are included in your cost input.