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Gross Profit Margin Calculator

Calculate gross profit, gross profit margin, markup, and cost of goods sold from your sales and direct costs.

Your Details

Overview

Use this Gross Profit Margin Calculator to quickly estimate gross profit, gross margin, and markup from your revenue and cost of goods sold. It is useful for checking product profitability, comparing periods, or reviewing pricing performance.

How it works

The calculator subtracts cost of goods sold from revenue to find gross profit. It then divides gross profit by revenue to calculate gross profit margin, and divides gross profit by cost of goods sold to calculate markup. These measures help show how much money is left after direct production or purchase costs, before overheads and other business expenses.

How to use this calculator

  1. 1Enter your total revenue for the period.
  2. 2Add your cost of goods sold for the same period.
  3. 3Review your gross profit result.
  4. 4Check the gross profit margin percentage.
  5. 5Use the markup figure to compare price against direct cost.

Example Calculation

Revenue

$10,000

Cost of Goods Sold

$6,000

Gross Profit

$4,000.00

If revenue is $10,000 and cost of goods sold is $6,000, gross profit is $4,000, gross profit margin is 40.00%, and markup is 66.67%.

Frequently asked questions

What does this gross profit margin calculator estimate?

It estimates gross profit, gross profit margin, and markup using your revenue and cost of goods sold.

What is gross profit?

Gross profit is the amount left after subtracting cost of goods sold from revenue. It does not include overheads, taxes, or other indirect expenses.

What is the difference between gross margin and markup?

Gross margin is gross profit as a percentage of revenue, while markup is gross profit as a percentage of cost.

What should be included in cost of goods sold?

Cost of goods sold usually includes direct costs such as materials, inventory purchase costs, and direct production costs tied to the goods sold.

Can I use this calculator for services?

Yes, if you enter service revenue and the direct costs of delivering that service, the calculator can still provide a useful gross margin estimate.

Explore Related Calculators

Net Profit Margin CalculatorCalculate net profit margin from revenue, expenses, taxes, and other income to see how much profit your business keeps from sales.Calculate →Markup CalculatorCalculate selling price, profit, and margin from your cost and target markup percentage.Calculate →Discount CalculatorCalculate the sale price, amount saved, and effective discount from an original price and discount details.Calculate →Revenue Growth CalculatorCalculate revenue growth over time and see the absolute increase and percentage change between two periods.Calculate →

Assumptions and warnings

Assumptions

  • Revenue and cost of goods sold are entered for the same time period.
  • Cost of goods sold includes direct costs only and excludes overheads and other operating expenses.
  • Results are estimates and depend on the accuracy of the figures you enter.

Warnings

  • This calculator provides a general business estimate and should not be treated as accounting or financial advice.
  • Check your figures carefully before using the result for pricing or reporting decisions.