Gross Profit Calculator

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

About Gross Profit Calculator

Margin divides profit by revenue; markup divides the same profit by cost. They are routinely confused, so both are shown — a 50% margin is a 100% markup. Margin is what funds every fixed cost in a business business, and mispricing by a few points is the difference between scaling profitably and scaling losses.

Formula

Gross Profit

Margin % = (Revenue − Cost of goods sold) ÷ Revenue × 100

Revenue: Money received
Cost of goods sold: Direct cost of delivering it

Worked example

With the default values below, Gross Profit Calculator returns Gross Margin of 40.00%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Revenueminimum 0: 500,000
Cost of goods soldminimum 0: 300,000

Results

Gross Margin: 40.00%
Profit: $200,000.00
Markup on Cost: 66.67%
Cost as Share of Revenue: 60.00%

Step by step

1Values used
2Gross Profit
3Gross Margin= 40.00
4Profit= 200,000.00
5Markup on Cost= 66.67
6Cost as Share of Revenue= 60.00

Assumptions and limits

The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Gross Profit calculated?

Margin % = (Revenue − Cost of goods sold) ÷ Revenue × 100 Margin divides profit by revenue; markup divides the same profit by cost. They are routinely confused, so both are shown — a 50% margin is a 100% markup.

Why does Gross Profit matter?

Margin is what funds every fixed cost in a business business, and mispricing by a few points is the difference between scaling profitably and scaling losses.

What values do I need to enter?

This calculator takes 2 inputs: Revenue, Cost of goods sold. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.