# Margin Calculator – Introduction

## What is margin?

The word margin has different definitions but the most common definition is that margin is the percentage based on the sales as well as the production. This is further used in order to assess a number of aspects as far as the business profitability is in question. There is another definition to margin & as per the usage of the word, margin in the finance field means that – it is said to be the holder of the financial instrument who will be required to deposit with the counterparty (this counterparty for the most of the times is said to be either broker or exchange) so that credit risk is covered to some or to a great extent.

## Margin Calculator

 Production Cost: Purchase Cost: Total Revenue: Selling price: Unit Cost: Total cost of goods: Gross profit: Gross profit percentage: % Individual Gross profit: Individual Gross profit percentage: %

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This credit risk is of that particular holder who poses for the said counterparty. In addition to this, as for the risk, it can occur due to any of the following reasons – cash borrowed from the counterparty so that financial instruments are bought / financial instruments are borrowed when stepping in to a derivative contract / financial instruments are bought in order to sell them.

On the other hand, as far as the margin in economics is concerned then it is stated to be a set of constraints or the limitations which formed the idea of the border. Apart from this, the change which is associated with either the relaxation or the tightening of these limitations is known as marginal change. It means that there is either change of limitations or a change in response to the change of limitations or the so – called restrictions.

## How to calculate margin using a mathematical formula?

The steps to be followed when you wish to calculate margin with the help of a mathematical formula, you would be required to follow the steps mentioned here. Firstly, you should put together the data from that time when the margin is to be calculated. Next step is to figure out the total revenue for the complete duration & this will be done with the help of the receipts that are generated in the said time. Keep reading to know the formulae that are related to the margin calculator. An individual will be able to find the following formulae – (1) total costs of the goods (2) gross profit (3) gross profit percentage (4) individual gross profit & the (5) individual gross profit percentage.

### Formula used in margin calculator

$$total\,costs\, of\, the\, good\,=\,production\, costs\,+\,purchase\, costs$$

$$gross \,profit\,=\,total\, revenue\,-\,cost\, of\, the \,goods$$

$$gross\, profit \,percentage\,=\, \frac{gross \,profit}{cost\, of \,the \,goods }\times 100$$

$$individual \,gross \,profit\,=\,selling \, price\,-\,unit\, cost$$

$$individual\, gross\, profit \,percentage\,=\, \frac{individual\, gross\, profit}{unit\, cost}\, \times 100$$

## How to use an online margin calculator?

To make use of the margin calculator available online, the basic step to be kept in mind is that the individual will have to first enter the cost followed by the revenue before they finally click on the calculate tab. One can also edit or re – enter the details to know the result.