Free Gross Profit Margin Calculator
Calculate gross profit margin to measure the percentage of revenue remaining after subtracting the direct cost of producing goods or services.
Gross Profit
$480,000.00
Gross Profit vs Revenue
How to Calculate Gross Profit Margin
Formula
Gross Profit = Revenue - COGS Gross Profit Margin = (Gross Profit / Revenue) x 100
Gross profit margin strips away only the direct costs of production, leaving a clear picture of how efficiently you convert raw materials and labor into sellable products. It is the first profitability checkpoint: if gross margin is weak, no amount of overhead control will produce healthy net profits.
Example Calculation
A company has $800,000 in revenue and $320,000 in cost of goods sold.
- 01Gross Profit = $800,000 - $320,000 = $480,000
- 02Gross Profit Margin = ($480,000 / $800,000) x 100 = 60%
- 03COGS as % of Revenue = ($320,000 / $800,000) x 100 = 40%
Frequently Asked Questions
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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.