Free Gross Margin Calculator
Calculate gross margin percentage from revenue and cost of goods sold (COGS). Measure production efficiency and pricing power.
USD
USD
Gross Margin
60.00%
Gross Profit$120,000.00
COGS as % of Revenue40.00%
Gross Margin vs Revenue
How to Calculate Gross Margin
Formula
Gross Margin % = [(Revenue - COGS) / Revenue] x 100
Gross margin measures how efficiently a company generates profit from its direct costs. A higher gross margin means more money is available to cover operating expenses and generate net profit.
Example Calculation
A company has $200,000 in revenue and $80,000 in cost of goods sold.
- 01Gross profit = $200,000 - $80,000 = $120,000
- 02Gross margin = ($120,000 / $200,000) x 100 = 60%
- 03COGS ratio = ($80,000 / $200,000) x 100 = 40%
Frequently Asked Questions
Learn More
How to Calculate Profit Margin
Learn how to calculate gross, operating, and net profit margins step by step. Understand what healthy margins look like across industries and how to improve yours.