Gross Margin Percentage (on Price)

Margin measures the same profit as markup does, but against the selling price. Cost $80, sell for $100, and the $20 profit is 20% of the $100 you collected. Accountants, lenders and every profit-and-loss statement speak in margin, because margin is the fraction of revenue you actually keep. When a supplier says the industry runs on 35 points, they mean margin.

The pricing direction is the one that matters daily: $P = C/(1 - g)$. Hitting a 40% margin on a $60 cost means charging $60/0.60 = \$100$, not $84. Adding 40% to the cost gives $84, which is only a 28.6% margin, and the $16 gap repeats on every single sale. That one substitution, adding the target margin instead of dividing by its complement, has quietly bankrupted more small contractors than any other arithmetic error in business.

Note the ceiling the algebra enforces. Margin can approach 100% but never reach it while the item still costs something, whereas markup has no upper limit at all. That asymmetry alone should tell you the two numbers are different animals.