Formula
Profit Margin = (Revenue − Cost) / Revenue × 100
Profit margin tells how efficient a business or product is at converting revenue into profit.
Example
If revenue is 1000 and cost is 700, margin = (1000 − 700) / 1000 × 100 = 30%.
FAQs
What is the difference between margin and markup?
Margin is based on sales price, while markup is based on cost.
Can it be negative?
Yes. A negative result means the business is operating at a loss.