<Li> To convert from markup to profit margin: </Li> <Dl> <Dd> Sale price − Cost = Sale price × Profit margin </Dd> <Dd> therefore Profit Margin = (Sale price − Cost) / Sale price </Dd> <Dd> Margin = 1 − (1 / (Markup + 1)) </Dd> <Dd> or Margin = Markup / (Markup + 1) </Dd> <Dd> Margin = 1 − (1 / (1 + 0.42)) = 29.5% </Dd> <Dd> or Margin = ($1.99 − $1.40) / $1.99 = 29.6% </Dd> </Dl> <Dd> Sale price − Cost = Sale price × Profit margin </Dd> <Dd> therefore Profit Margin = (Sale price − Cost) / Sale price </Dd>

Is the difference between the cost of a product or service and its selling price