Accounting / Accounting tools / Margin calculator

Margin calculator

Calculating your margin will help you find the right selling price for your product so you can optimize your profits. To use this calculator, simply enter the gross cost for your item and then how much money you’d like to make on each sale.

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What is margin?

Generally speaking, your profit margin is what your company uses to determine what percentage of sales has turned into profits. It’s also considered your bottom line after all other expenses have been taken into account. Generally speaking, you'll want to increase your gross profit margins, which can be accomplished by either increasing profits or decreasing costs.

Helpful tips

Your profit margin offers critical insight into the health of your business, such as whether you’re making money or you’ve priced your product appropriately. Here are some helpful tips:

  • Profit margins generally differ from industry to industry. Look at how your profit margin compares with other businesses in your sector as a benchmark.
  • While a healthy margin is important, it’s only one measurement of your financial health and shouldn’t come at the cost of other factors, such as satisfied customers, happy employees, steady growth and good debt ratios.
  • Getting paid on time is key to increasing your profits. Check out how Wave offers better payment solutions to help you manage your cash flow and improve your bottom line.