jQuery Dropdowns

Profit margin vs Markup percentage

Download Excel file on Google drive.

Excel file will show the comparison of Margin and Markup.
The formula to calculate Profit margin and Markup percentage is also included.
To convert the percentages quickly without Excel, use Omni calculator.

Gross Profit Margin is the percentage of the sale price that is the gross profit.
Markup percentage is the percentage you multiplied the cost to get the gross profit.

Example:
$100 sale price and $80 cost of goods sold is $20 gross profit.

Margin: $20 is 20% of $100.
Markup: $80 multiplied by 25% gives you $20 gross profit.


Margin formula
($100-$80)/$100 = 0.2 * 100 = 20% margin

Markup formula
($100-$80)/$80) = 0.25 * 100 = 25% markup


Another explanation:
Profit margin is how much of the sale price is profit.
Markup percentage is how much you marked up the cost to get the sale price. Cost + Profit = Sale Price