How to use it
- Use the formula below with your own figures.
The formula
Margin = (price − cost) ÷ price × 100%.
Worked example
Selling at $100 with $60 cost is a 40% margin.
Frequently asked questions
Margin vs markup?
Margin is on price; markup is on cost.
What's healthy?
It varies widely by industry.
Tips
- Know your break-even before scaling spend.
- Separate margin from markup when pricing.
- Discount future cash flows to value projects.
Key terms
- Break-even
- Where revenue covers costs.
- Margin
- Profit as a percent of price.
- NPV
- Discounted value of future cash flows.