Gross Profit Calculator
Calculate your business gross profit and margin.
Direct costs to produce goods/services
Gross Profit = Revenue - COGS\nGross Margin = (Gross Profit / Revenue) x 100
Revenue: $1,000,000\nCOGS: $600,000\n\nGross Profit = $400,000\nGross Margin = 40%
What is gross profit?
Revenue minus Cost of Goods Sold (COGS). It shows profit before operating expenses.
What is included in COGS?
Direct costs: materials, labor, manufacturing overhead. Excludes marketing, admin, interest, taxes.
What is a good gross margin?
Varies by industry. Software: 70-90%, Retail: 20-40%, Manufacturing: 25-35%.
How is this different from net profit?
Gross profit is before operating expenses. Net profit is after all expenses and taxes.
Why is gross margin important?
Shows pricing power and production efficiency. Higher margins mean more money for operations and growth.
📐 Formula
Gross Profit = Revenue - COGS\nGross Margin = (Gross Profit / Revenue) x 100
📝 Example Calculation
Revenue: $1,000,000\nCOGS: $600,000\n\nGross Profit = $400,000\nGross Margin = 40%
❓ Frequently Asked Questions
What is gross profit?▼
Revenue minus Cost of Goods Sold (COGS). It shows profit before operating expenses.
What is included in COGS?▼
Direct costs: materials, labor, manufacturing overhead. Excludes marketing, admin, interest, taxes.
What is a good gross margin?▼
Varies by industry. Software: 70-90%, Retail: 20-40%, Manufacturing: 25-35%.
How is this different from net profit?▼
Gross profit is before operating expenses. Net profit is after all expenses and taxes.
Why is gross margin important?▼
Shows pricing power and production efficiency. Higher margins mean more money for operations and growth.