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How to Calculate Profit Margin
Formula
Profit margin is the percentage of revenue that is profit, calculated as (Revenue - Cost) / Revenue.
Understanding the difference between margin and markup is crucial for pricing and profitability analysis.
Common use cases:
- Pricing decisions
- Profitability analysis
- Comparing margin vs markup
Frequently Asked Questions
Dr. David Park
Applied Mathematician, PhD Mathematics
David holds a PhD in Applied Mathematics from MIT. He has published research on numerical methods and computational algorithms used in engineering and scientific calculators.
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