Margin & markup
They are not the same number, and confusing them is how a price list quietly loses money.
- Runs
- In this tab
- Data sent
- None
- Rounding
- Once, at the end
- Also in
- The Chrome extension
Margin & markup, worked
Showing a worked example — type over it
Result
Where these numbers come from.
Negatives are parenthesised because that is what a statement does. The rest is four promises.
Minor units, never floats
Amounts are integers in the currency's smallest unit, end to end. A float never touches a cent.
Rounded once
Rounded once, at the end — never per operand, which is how a split stops summing to the whole.
Unit tested
The arithmetic lives in one unit-tested module, shared without reimplementation with the extension.
No network
There is no request to make. What you type stays in this tab and is gone when you close it.
More in money maths
- VAT / sales taxGross to net is a division, not a multiplication. The three figures always add back up.
- FX conversion & gain/lossThe rate is the one in your policy, so you type it. No live rate, no network call, no stale surprise.
- Penny-exact allocationSplit 100.00 three ways and get 33.34 / 33.33 / 33.33 — never a cent left in suspense.
- NPV, IRR & XIRRIRR by bisection, so a sign-change-heavy series does not converge on a confident wrong answer.
- Effective vs nominal rate12% compounded monthly is 12.68%. That difference is the covenant you either pass or fail.
Read it in context
- Founder guide · 7 minHow to read an income statement (P&L)Revenue, cost of revenue, gross margin, operating expenses and net income, read line by line, on accrual basis, with the mistakes founders make most.
- Founder guide · 6 minChart of accounts for startups: a starting templateA starting chart of accounts for a US startup: number ranges, the expense accounts you need, and when to add an account versus a class or tracking tag.
- Founder guide · 4 minHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
The same number, elsewhere.
A calculator answers the question once. These carry the answer into a product, name what it computed, and argue the method.
- ComponentMetricDefinitionEvery metric requires one. Formula with values substituted.
- ComponentKpiCardMetric + delta + optional sparkline.
- ComponentBudgetVsActualPolarity-aware, materiality-filtered, versions tracked.
- TermGross marginGross margin is a profitability metric, calculated as (Revenue − COGS) ÷ Revenue.
- TermContribution marginContribution margin is a profitability metric, calculated as (Revenue − Variable costs) ÷ Revenue.
- TermNet marginNet margin is a profitability metric, calculated as Net income ÷ Revenue.
- TermGross profitNet revenue less cost of revenue, as an amount
- DocMetric definitionsEvery metric in this system ships with its formula, its period, its inputs, and its source. A KPI without a definition is a number people argue about in meetings.
- EntryJournal entry for a sale on accountFor a sale on credit, debit Accounts receivable and credit Revenue for the price; under a perpetual inventory system also debit Cost of goods sold and credit Inventory for what the goods cost. When the customer pays, debit Cash and credit Accounts receivable.
- DocCurrency decimal placesHow many decimals each ISO 4217 code is stored at — JPY 0, USD 2, KWD 3.