Understand margins, markups, gross/net yields, and analyze pricing adjustments instantly.
Net margin: 24%
Understand standard accounting metrics to optimize product pricing.
Profit Margin is the ratio of profit relative to the **Selling Price**. It represents what percentage of your total sales revenue is retained as profit.
Markup is the ratio of profit relative to the **Cost Price**. It represents by how much percentage you mark up the cost of an item to arrive at its final selling price. A 50% markup is equivalent to a 33.3% profit margin.
Gross Profit is simply your revenue minus the direct Cost of Goods Sold (COGS). Net Profit takes it a step further, subtracting all other operating expenses like rent, utilities, marketing, salaries, and interest charges. Net profit represents your true cash profit.
No, profit margin represents profit as a fraction of the selling price, which cannot exceed the selling price. However, **Markup** can easily go above 100%, 200%, or more (e.g. buying for ₹10 and selling for ₹30 is a 200% markup but a 66.7% margin).