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, and this is the mistake that costs money. Both are the same gross profit, but margin divides it by revenue and markup divides it by cost. A profit of 400.00 on revenue of 1,000 and a cost of 600 is a margin of 40.0% and a markup of 66.6667%. Revenue is the larger figure, so the margin is always the smaller percentage. This page shows both on every result, each labelled with what it was divided by, rather than printing one and letting it stand for the other.

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?

No. Gross profit stops at the cost of the goods themselves. Rent, salaries outside production, marketing, payment fees, interest and tax all sit below it and none of them are subtracted here. If you want a cost counted, add it into the cost of goods sold before you start and both percentages will then be measured against that fuller cost.

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?

That depends entirely on the trade, and this page does not judge it: a grocer and a software seller have margins that are nowhere near each other and both can be normal. What the tool does is compute the number exactly from the two figures you enter and show the arithmetic beside it, so the comparison you make afterwards is yours.

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.

Gross Profit Calculator

Gross profit is revenue minus the cost of goods sold, and the two percentages people quote from it are not the same number: margin divides that profit by revenue, markup divides it by cost. On revenue of 1,000 with a cost of goods sold of 600 the profit is 400.00, which is a margin of 40.0% and a markup of 66.6667%, and this page shows both, each labelled with the figure it was divided by. Switch to per unit and a quantity with a price and a cost each is multiplied into those same two totals, with every step printed in the working under the answer. It runs in your browser, needs no account, and assumes no currency: pick a symbol for the display, or none, and the arithmetic is identical either way.

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, and this is the mistake that costs money. Both are the same gross profit, but margin divides it by revenue and markup divides it by cost. A profit of 400.00 on revenue of 1,000 and a cost of 600 is a margin of 40.0% and a markup of 66.6667%. Revenue is the larger figure, so the margin is always the smaller percentage. This page shows both on every result, each labelled with what it was divided by, rather than printing one and letting it stand for the other.
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?: No. Gross profit stops at the cost of the goods themselves. Rent, salaries outside production, marketing, payment fees, interest and tax all sit below it and none of them are subtracted here. If you want a cost counted, add it into the cost of goods sold before you start and both percentages will then be measured against that fuller cost.
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?: That depends entirely on the trade, and this page does not judge it: a grocer and a software seller have margins that are nowhere near each other and both can be normal. What the tool does is compute the number exactly from the two figures you enter and show the arithmetic beside it, so the comparison you make afterwards is yours.
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.

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.