Margin and markup are two terms that are often used interchangeably, but they refer to slightly different concepts. Margin is the difference between the selling price of a good or service and the cost of producing it. It is calculated by dividing the difference by the selling price and expressing the result as a percentage. For example, if a company sells a product for $100 and it costs $75 to produce, the margin would be 25% ($25 / $100). Markup, on the other hand, is the amount added to the cost of a product to determine the selling price. It is calculated by dividing the difference between the selling price and the cost by the cost and expressing the result as a percentage. Using the same example as above, if a company sells a product for $100 and it costs $75 to produce, the markup would be 33.33% ($25 / $75). In summary, margin and markup are similar in that they both express the difference between the selling price and the cost of a product as a percentage. However, margin is calculated based on the selling price, while markup is calculated based on the cost.
