Business

Gross Profit Calculator

Find gross profit and gross margin from revenue and the direct cost of goods sold.



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The gross profit result is what remains from revenue after direct costs, and the margin shows that remainder as a share of revenue.

Formula

Gross profit = revenue minus cost of goods sold. Gross margin = gross profit divided by revenue, shown as a percentage.

How it works

Type in total revenue and the direct costs of producing or buying what you sold, such as materials and direct labour. The result shows what is left before rent, salaries and other overheads. A higher margin means each sale keeps more money toward running the business.

Worked example

For example, revenue of $10,000 minus cost of goods sold of $6,000 gives a gross profit of $4,000, which is a 40.0% margin.

FAQs

What counts as cost of goods sold?
Direct costs tied to what you sold: materials, wholesale stock and direct production labour. Rent and marketing are not included here.

Why is my gross profit negative?
That means direct costs were higher than revenue, so the selling price does not cover even the cost of the goods.

Is gross profit the same as net profit?
No. Net profit subtracts all other expenses too, so it is usually lower than gross profit.

Estimates only, not financial advice. Check your figures before making a business decision.

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Formula shown on the page

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