Profit margin is the difference between the total cost to run your business and the total revenue it brings in. The higher your profit margin, the more money your business gets to keep.
Profit margin is calculated with selling price (or revenue) taken as base times 100. It is the percentage of selling price that is turned into profit, whereas “profit percentage” or “markup” is the percentage of cost price that one gets as profit on top of cost price. While selling something one should know what percentage of profit one will get on a particular investment, so companies calculate profit percentage to find the ratio of profit to cost.
Profit margin = ((Sell Price – Buy Price) / Sell Price)*100
Profit Percentage or Markup = ((Sell Price – Buy Price) / Buy Price)*100
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