Gross Profit Margin
Free Gross Profit Margin calculator with clear step-by-step results.
About Gross Profit Margin
Gross margin shows how efficiently a business converts sales into gross profit after direct costs.
Formula
Formula
Gross profit = revenue − COGS; margin = gross profit ÷ revenue × 100
Worked example
With the default values below, Gross Profit Margin returns Gross Profit of $80,000.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Revenueminimum 0 $
- 200,000 $
- Cost of goods soldminimum 0 $
- 120,000 $
Results
- Gross Profit
- $80,000.00
- Gross Profit Margin
- 40.0%
- COGS as % of Revenue
- 60.0%
Step by step
- 1Values used
- 2Formula
- 3Gross Profit= $80,000
- 4Gross Profit Margin= 40.0
- 5COGS as % of Revenue= 60.0
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 1 decimal place, 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 does this calculator work?
Gross margin shows how efficiently a business converts sales into gross profit after direct costs.
Why does this matter?
Direct production costs only — not operating overhead.