Gross Profit Calculator
Calculate gross profit dollars and gross profit margin percentage by subtracting Cost of Goods Sold (COGS) from net sales revenue.
Gross Sales Revenue & Cost of Goods Sold
Gross Profit & Margin Formula
Gross Profit = Total Sales Revenue - Cost of Goods Sold; Gross Margin % = (Gross Profit / Total Sales Revenue) × 100- Sales Revenue: Net receipts from merchandise sales or delivered client services.
- Cost of Goods Sold (COGS): Direct raw materials, inventory wholesale cost, and manufacturing labor.
Step-by-Step Worked Example
Calculation Steps:
- Gross Profit = $150,000 - $60,000 = $90,000
- Gross Profit Margin = ($90,000 / $150,000) × 100 = 60.0%
- COGS % of Revenue = ($60,000 / $150,000) × 100 = 40.0%
How to Use This Calculator
- 1Enter total gross or net sales revenue for the reporting period.
- 2Enter the direct Cost of Goods Sold incurred to generate those sales.
Assumptions & Limitations
- COGS excludes indirect administrative overhead, marketing, and taxes.
- Revenues reflect net sales after customer refunds and returns.
Frequently Asked Questions
What is the difference between gross profit and net profit?
Gross profit only subtracts direct production costs (COGS) from revenue. Net profit subtracts all expenses, including office rent, marketing, software, interest, and taxes.
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Net Profit Calculator
Calculate bottom-line net profit, operating profit (EBIT), and net margin percentage after deducting COGS, operating overhead (SG&A), interest, and taxes.