What this tool is for
Inventory Margin Calculator is built for business planning inside business calculators when you need to apply the formula shown on this page to the entered values. It focuses on inventory margin instead of making you adapt a broad calculator to a narrow task.
When to use it
Use it when revenue and cost are already known and you want a fast estimate before comparing options, checking a worksheet, or copying the result into another workflow.
Inputs
- Revenue is the money value used by the formula. Use $ for this field.
- Cost is the money value used by the formula. Use $ for this field.
Formula
margin = (revenue - cost) / revenue x 100
Example
$5,000 revenue and $3,200 cost gives 36% margin.
What the result means
The result labeled "Margin" is the direct output of margin = (revenue - cost) / revenue x 100. In the worked example, $5,000 revenue and $3,200 cost gives 36% margin.
Before you rely on the result
Treat the output as a planning estimate. Taxes, refunds, fees, contracts, accounting policy, and local rules can change the real business result.