Gross Profit Calculator
Calculate your gross profit and gross profit margin to understand your business profitability
Results
Understanding Your Results
Enter your revenue and cost of goods sold to see your gross profit calculation.
What is Gross Profit?
Gross profit is the profit a business makes after deducting the costs associated with making and selling its products. It's calculated by subtracting the cost of goods sold (COGS) from total revenue.
Formula: Gross Profit = Revenue - Cost of Goods Sold
What is Gross Profit Margin?
Gross profit margin is a profitability ratio that shows what percentage of revenue is left after paying for the cost of goods sold. It's expressed as a percentage.
Formula: Gross Profit Margin = (Gross Profit ÷ Revenue) × 100
Why is it Important?
- Measures how efficiently you produce goods
- Helps set pricing strategies
- Indicates business viability
- Useful for comparing with competitors
- Essential for financial planning
Good Gross Profit Margins
- Excellent: 50%+ (High-margin businesses)
- Good: 30-50% (Healthy profitability)
- Average: 10-30% (Standard for many industries)
- Poor: Below 10% (May need improvement)
Note: Margins vary significantly by industry