1. What is a Margin Calculator?

Definition: This calculator determines the profit margin percentage based on revenue and cost figures in GBP.

Purpose: It helps businesses and individuals quickly assess their profit margins for financial analysis and pricing strategies.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Margin — Profit margin percentage
• Revenue — Total income in GBP
• Cost — Total expenses in GBP

Explanation: The difference between revenue and cost is divided by revenue to get the margin ratio, then multiplied by 100 to convert to percentage.

3. Importance of Margin Calculation

Details: Understanding your margin helps with pricing decisions, cost control, and overall business profitability assessment.

4. Using the Calculator

Tips: Enter revenue and cost amounts in GBP. Both values must be positive numbers, and revenue should be greater than or equal to cost.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between margin and markup?
A: Margin shows profit as a percentage of revenue, while markup shows profit as a percentage of cost.

Q2: What is a good margin percentage?
A: This varies by industry, but generally 10-20% is considered healthy for most businesses.

Q3: Should I use gross or net figures?
A: This calculator works for either - use gross figures for gross margin or net figures for net profit margin.

Q4: Can cost be higher than revenue?
A: No, the calculator requires revenue ≥ cost as negative margins aren't calculated.

Q5: How often should I calculate my margin?
A: Regular calculation (monthly/quarterly) helps track business performance over time.