How do you calculate gross profit?

Subtract the cost of goods sold from revenue. Revenue of 1,000 with a cost of goods sold of 600 gives a gross profit of 400.00. That is the whole method, and the page prints the line it used with your own figures in it. Cost of goods sold means what the goods you actually sold cost you to make or buy, so it moves with sales rather than with time.

What is the gross profit margin formula?

Gross profit divided by revenue, multiplied by 100. On a profit of 400.00 from revenue of 1,000 that is 400.00 / 1,000.00 x 100 = 40.0%. The margin answers what share of every sale is left after the goods are paid for, which is why revenue, not cost, is the denominator.

Is gross margin the same as markup?

No. Margin measures gross profit against revenue; markup measures it against cost of goods sold. Both percentages are labelled separately on every result. For nonnegative revenue and cost, with both denominators above zero, margin is smaller than markup unless the sale breaks even.

How do I work out gross profit per unit?

Switch the Figures control to Per unit and enter the quantity, the price each and the cost each. 120 units at 25 costing 15 comes to revenue of 3,000.00, a cost of goods sold of 1,800.00 and a gross profit of 1,200.00, with the same 40.0% margin and 66.6667% markup as the totals it adds up to. The two multiplications are printed in the working, so you can check the totals as well as the answer.

What happens if revenue is zero?

The profit is still shown and the margin is left undefined, because margin divides by revenue and there is nothing to divide by. Revenue of 0 against a cost of 250 reads as a gross loss of -250.00, a margin reported as undefined rather than as 0%, and a markup of -100.0%. A cost of goods sold of zero does the same to markup, which divides by cost.

Does gross profit include overhead, wages, shipping or tax?

The calculator subtracts only the cost of goods sold you enter. It does not classify expenses or subtract overhead, interest or tax separately. Use a COGS total prepared for your records; the tool does not decide which production, delivery or wage costs belong in it.

Is gross profit the same as net profit?

No. Net profit is what is left after operating expenses, interest and tax, and it needs figures this page never asks for. Gross profit is the first line of that sequence: revenue minus the cost of goods sold, and nothing else. This calculator computes that one step and does not model the rest.

What counts as a good gross margin?

This page calculates a percentage from your figures and does not judge whether it is good for your business. It does not supply industry benchmarks or pricing advice.

Can it handle a loss?

Yes. A cost of goods sold above revenue is a loss, not an error: revenue of 1,800 against a cost of 3,000 reads as a gross loss of -1,200.00, a margin of -66.6667% and a markup of -40.0%. Selling at cost is reported as breaking even, with both percentages at zero. Input is refused only where no arithmetic exists for it: a blank box, text that is not a number, a negative revenue or cost, or a figure past 1,000,000,000,000. Each refusal names the box to fix and what to put in it.

Is anything I type sent anywhere?

No. The arithmetic runs in your browser and nothing is uploaded, so a revenue figure never leaves the device. The last figures you entered are kept in this browser's own local storage so the page opens where you left it, and the Start over button above the heading forgets them.

Is gross profit percentage the same as gross profit ratio or rate?

Here those names mean gross profit divided by revenue. The Margin readout expresses that ratio as a percentage, so a ratio of 0.4 is 40.0%. Gross profit itself is the money amount; markup uses cost as its denominator instead.

Can I calculate gross profit for food, drinks or a restaurant?

Yes. Per unit works for a dish or drink when you have its selling price, its cost of goods sold and the quantity sold. Totals works for combined restaurant sales and COGS over a period. The result is gross profit, before the other expenses needed to calculate net profit.

Can I use this in the UK, Australia or New Zealand?

Yes, for the same revenue-minus-COGS arithmetic. Choose Pound (£) for GBP, Dollar ($) for AUD or NZD, or No symbol. The symbol only labels your figures: there is no exchange conversion, tax calculation or local accounting treatment.

What are the equivalent Excel formulas?

With revenue in A2 and COGS in B2, gross profit is =A2-B2, margin is =IF(A2=0,"",(A2-B2)/A2), and markup is =IF(B2=0,"",(A2-B2)/B2). Format the last two cells as percentages. This page calculates in the browser and does not supply an Excel workbook or template.

Gross Profit Calculator

Calculate gross profit and its percentage of revenue, with markup shown separately against cost. Enter sales and cost of goods sold, or switch to Per unit for a quantity, selling price and cost each. Choose a currency symbol for display; the arithmetic runs in your browser without an account.

Gross profit$400.00revenue $1,000.00 · COGS $600.00 · margin 40.0% · markup 66.6667%

Figures
Revenue
COGS
Currency
Gross profit: $400.00
Margin: 40.0%profit over revenue
Markup: 66.6667%profit over COGS

Gross profit $400.00 on revenue $1,000.00 and cost of goods sold $600.00: margin 40.0%, markup 66.6667%.

The working

revenue $1,000.00 - cost of goods sold $600.00 = gross profit $400.00
margin = $400.00 / $1,000.00 x 100 = 40.0%
markup = $400.00 / $600.00 x 100 = 66.6667%

Revenue is everything you took in over the period and cost of goods sold is what those goods cost you to make or buy.

A percentage here runs past four decimal places, so it is rounded to four for display. Nothing is rounded before the division.

Three worked examples, run through the same arithmetic as the answer above:

Revenue 1,000, COGS 600totals mode
$400.00, margin 40.0%, markup 66.6667%
120 units at 25 costing 15unit mode
$1,200.00, margin 40.0%, markup 66.6667%
Revenue 0, COGS 250margin has no denominator
-$250.00, margin undefined, markup -100.0%

Accuracy. Exact arithmetic: gross profit is revenue minus the cost of goods sold, and gross margin is that profit divided by revenue. It computes the formula printed beside the answer and nothing else: no overhead, no tax treatment, no accounting standard and no advice.

Margin and markup are not the same number

Both come from one gross profit, divided by two different figures. On revenue of 1,000 with a cost of goods sold of 600, the profit is 400: measured against the revenue that is a margin of 40.0%, and measured against the cost it is a markup of 66.6667%. Revenue is the larger figure, so the margin is always the smaller percentage, and mixing the two up is the most common error in this arithmetic. Both are printed above, each labelled with the figure it was divided by, so the one you meant is on screen. Gross profit stops at the cost of the goods themselves: overhead, wages outside production, shipping, fees and tax are not part of it.

Common questions

How do you calculate gross profit?: Subtract the cost of goods sold from revenue. Revenue of 1,000 with a cost of goods sold of 600 gives a gross profit of 400.00. That is the whole method, and the page prints the line it used with your own figures in it. Cost of goods sold means what the goods you actually sold cost you to make or buy, so it moves with sales rather than with time.
What is the gross profit margin formula?: Gross profit divided by revenue, multiplied by 100. On a profit of 400.00 from revenue of 1,000 that is 400.00 / 1,000.00 x 100 = 40.0%. The margin answers what share of every sale is left after the goods are paid for, which is why revenue, not cost, is the denominator.
Is gross margin the same as markup?: No. Margin measures gross profit against revenue; markup measures it against cost of goods sold. Both percentages are labelled separately on every result. For nonnegative revenue and cost, with both denominators above zero, margin is smaller than markup unless the sale breaks even.
How do I work out gross profit per unit?: Switch the Figures control to Per unit and enter the quantity, the price each and the cost each. 120 units at 25 costing 15 comes to revenue of 3,000.00, a cost of goods sold of 1,800.00 and a gross profit of 1,200.00, with the same 40.0% margin and 66.6667% markup as the totals it adds up to. The two multiplications are printed in the working, so you can check the totals as well as the answer.
What happens if revenue is zero?: The profit is still shown and the margin is left undefined, because margin divides by revenue and there is nothing to divide by. Revenue of 0 against a cost of 250 reads as a gross loss of -250.00, a margin reported as undefined rather than as 0%, and a markup of -100.0%. A cost of goods sold of zero does the same to markup, which divides by cost.
Does gross profit include overhead, wages, shipping or tax?: The calculator subtracts only the cost of goods sold you enter. It does not classify expenses or subtract overhead, interest or tax separately. Use a COGS total prepared for your records; the tool does not decide which production, delivery or wage costs belong in it.
Is gross profit the same as net profit?: No. Net profit is what is left after operating expenses, interest and tax, and it needs figures this page never asks for. Gross profit is the first line of that sequence: revenue minus the cost of goods sold, and nothing else. This calculator computes that one step and does not model the rest.
What counts as a good gross margin?: This page calculates a percentage from your figures and does not judge whether it is good for your business. It does not supply industry benchmarks or pricing advice.
Can it handle a loss?: Yes. A cost of goods sold above revenue is a loss, not an error: revenue of 1,800 against a cost of 3,000 reads as a gross loss of -1,200.00, a margin of -66.6667% and a markup of -40.0%. Selling at cost is reported as breaking even, with both percentages at zero. Input is refused only where no arithmetic exists for it: a blank box, text that is not a number, a negative revenue or cost, or a figure past 1,000,000,000,000. Each refusal names the box to fix and what to put in it.
Is anything I type sent anywhere?: No. The arithmetic runs in your browser and nothing is uploaded, so a revenue figure never leaves the device. The last figures you entered are kept in this browser's own local storage so the page opens where you left it, and the Start over button above the heading forgets them.
Is gross profit percentage the same as gross profit ratio or rate?: Here those names mean gross profit divided by revenue. The Margin readout expresses that ratio as a percentage, so a ratio of 0.4 is 40.0%. Gross profit itself is the money amount; markup uses cost as its denominator instead.
Can I calculate gross profit for food, drinks or a restaurant?: Yes. Per unit works for a dish or drink when you have its selling price, its cost of goods sold and the quantity sold. Totals works for combined restaurant sales and COGS over a period. The result is gross profit, before the other expenses needed to calculate net profit.
Can I use this in the UK, Australia or New Zealand?: Yes, for the same revenue-minus-COGS arithmetic. Choose Pound (£) for GBP, Dollar ($) for AUD or NZD, or No symbol. The symbol only labels your figures: there is no exchange conversion, tax calculation or local accounting treatment.
What are the equivalent Excel formulas?: With revenue in A2 and COGS in B2, gross profit is =A2-B2, margin is =IF(A2=0,"",(A2-B2)/A2), and markup is =IF(B2=0,"",(A2-B2)/B2). Format the last two cells as percentages. This page calculates in the browser and does not supply an Excel workbook or template.

Exact arithmetic: gross profit is revenue minus the cost of goods sold, and gross margin is that profit divided by revenue. It computes the formula printed beside the answer and nothing else: no overhead, no tax treatment, no accounting standard and no advice.