How this calculator works
Gross profit excludes operating expenses, interest and taxes. Use revenue and COGS for the same reporting period; this is an arithmetic comparison rather than an accounting classification decision. Margin is undefined when revenue is zero.
The formula
Gross profit = revenue − COGS. Gross margin = gross profit / revenue × 100.A quick example
Revenue of 10,000 and COGS of 6,000 give gross profit of 4,000 and a 40% gross margin.
How to use this calculator
- Choose the settings that match your scenario, using the units shown beside each field.
- Enter revenue, cost of goods sold.
- Calculate, then review the method and assumptions alongside the results.
A few common questions
Can gross profit be negative?
Yes. A negative result means entered COGS exceeds revenue.
Are salaries always part of COGS?
No. Classification depends on the business and accounting policy; enter the costs appropriate to your records.