Gross Profit Calculator

Calculate your gross profit and gross profit margin to understand your business profitability

£
Enter your total sales revenue
£
Enter the direct costs of producing your goods

Results

Gross Profit £0.00
Gross Profit Margin 0%

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