Gross Profit Calculator
Find your gross profit, gross margin and operating profit from revenue, cost of goods sold and operating expenses.
How the gross profit calculator works
Gross profit is revenue minus the direct cost of making or buying what you sell. Gross margin turns that into a percentage of revenue. If you add operating expenses such as rent, wages and marketing, you also get operating profit and operating margin.
The formulas
Example: Revenue of $100,000 and COGS of $60,000 gives a gross profit of $40,000.00, a gross margin of 40% and a markup of 66.67%. After $25,000 of operating expenses, operating profit is $15,000.00.
For a deeper look at pricing, see our margin calculator.
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Frequently asked questions
How do you calculate gross profit?
Subtract cost of goods sold from revenue.
What is the difference between gross profit and net profit?
Gross profit only subtracts direct costs. Net profit subtracts all expenses, interest and taxes.
What is a good gross margin?
It depends on the industry. Software can be 70 to 90 percent while retail is often 20 to 50 percent.
What is included in COGS?
Materials, direct labor and other costs tied directly to the products you sold.
What is the difference between margin and markup?
Margin is profit divided by revenue. Markup is profit divided by cost, so markup is always larger.
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