Profit Margin Calculator accuracy and testing

Formula source

• The formula for Gross Profit Margin is: **Margin % = ((Revenue - Cost) / Revenue) * 100** For example, if you sell a shirt for $50 that cost you $25, your margin is ($25 / $50) = 0.5 or 50%.

Test cases

Known limitations

• This page documents the checked-in calculator logic and does not certify results for every real-world edge case.
• Use the result as a planning estimate unless the calculator page states a stricter purpose.

Assumptions

• This calculator looks at gross profit only and does not include overhead, taxes, or financing costs.
• Revenue must be positive for margin to be defined.
• Inputs are assumed to represent one item, one sale, or one average unit scenario.
• Markup is defined as profit divided by cost, so it is undefined when cost is zero.

Unit handling

• Cost of Item accepts values in $.
• Selling Price accepts values in $.
• Profit Margin is displayed as a percentage.
• Gross Profit is displayed as currency.
• Markup is displayed as a percentage.

Rounding rules

• Number displays use up to 2 decimal places in the calculator UI.
• Currency outputs are displayed with standard US dollar formatting.
• Percent outputs are displayed with two decimal places.

Version history

Change log