📊 Profit Margin Calculator
Calculate profit margin and product profitability
Select Calculation Type
💡 Difference Between Margin and Markup
- Profit Margin: Profit as percentage of selling price. Example: If selling price is 100 SAR and profit is 30 SAR, margin = 30%
- Markup: Profit as percentage of cost. Example: If cost is 70 SAR and profit is 30 SAR, markup = 42.86%
Tips:
- Healthy retail margin: 20-50%
- Calculate all costs (direct and indirect)
- Monitor competitor pricing
- Review your prices regularly
Frequently Asked Questions
Profit margin is the percentage of revenue remaining as profit after costs. Calculated by dividing profit by revenue and multiplying by 100.
Gross is after deducting cost of goods only, while net is after deducting all expenses including rent, salaries, and taxes.
It varies by sector. Generally, 10% is average, 20% is good, and 30%+ is excellent. Services usually have higher margins than retail.
Increase margins by: reducing costs, reasonably raising prices, improving operational efficiency, and focusing on higher-margin products.
VAT at 15% affects cash flow but does not directly impact profit margin as it is collected from customers and paid to the government.