💰 Profit Margin Calculator

Calculate Gross & Net profit margins and operating expenses.

💰 Margin Inputs
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₹
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📊 Profit Analysis
Gross Margin
40.0%
Net Margin
25.0%
Gross Profit
₹40,000
Net Profit
₹25,000
❓ Frequently Asked Questions

What is the difference between Markup and Gross Profit Margin?

Markup is the percentage added to the cost price to determine the selling price (e.g. adding 50% markup to a ₹100 product results in a selling price of ₹150). Profit Margin, however, measures how much of the selling price is profit (e.g. a profit of ₹50 on a ₹150 selling price is a 33.3% profit margin).

How does a higher Inventory Turnover Ratio affect my retail shop?

A higher turnover ratio indicates that inventory is sold and replaced rapidly, reflecting strong sales demand and efficient cash flow. Conversely, a low turnover ratio means products are sitting in storage, increasing carrying costs and risk of obsolescence.

Why is a 28% to 35% Food Cost target standard for restaurants?

A restaurant's food cost must leave enough gross profit margin to cover high operational costs like rent, kitchen labor, marketing, and utilities. Keeping food ingredients within 28-35% of menu prices ensures the restaurant remains financially viable.