Free online calculator
Gross Profit Calculator
Calculate profit after cost of goods sold and express it as a share of revenue. Includes a worked example, formula and practical FAQs.
Formula: Gross profit = revenue − COGS; gross margin = gross profit ÷ revenue × 100
How to use the Gross Profit Calculator
Calculate profit after cost of goods sold and express it as a share of revenue. Use revenue and COGS from the same period.
Formula
Gross profit = revenue − COGS; gross margin (%) = gross profit ÷ revenue × 100.
Worked example
$50,000 revenue less $30,000 COGS leaves $20,000 gross profit and a 40% gross margin.
Interpretation and limitations
Revenue must be positive. Gross profit excludes other expenses unless they are included in your COGS classification. It should not be labelled net income.
Gross Profit questions
What is the difference between gross profit and gross margin?
Gross profit is a currency amount; gross margin expresses that amount as a percentage of revenue.
Can gross profit be negative?
Yes. It is negative when COGS exceeds revenue, indicating that sales do not cover the entered cost of goods.
Continue your calculation
For the next step, use the COGS Calculator or the Net Profit Margin Calculator. Review each tool’s input definitions before carrying a result into another calculation.
Frequently asked questions
Is this calculator free?
Yes. It runs in your browser and does not require an account.
How should I use the result?
Use the result as a planning estimate and verify business-critical decisions against your source records.