Gross Profit Calculator
Determines gross profit by subtracting cost of goods sold from total revenue
Total income from sales and services
Direct costs of producing goods or services
Enter revenue and COGS to calculate gross profit
Gross profit as a percentage of revenue
Gross profit as a percentage of cost
Frequently Asked Questions
What is gross profit?
Gross profit is total revenue minus the cost of goods sold (COGS). It represents the money left to cover operating expenses, taxes, and profit after paying for the products or services you sold. It does not include overhead costs like rent or salaries.
What is the difference between gross margin and markup?
Gross margin is gross profit as a percentage of revenue (profit / revenue). Markup is gross profit as a percentage of cost (profit / cost). A product that costs $60 and sells for $100 has a 40% gross margin but a 66.7% markup.
What is a good gross profit margin?
It depends on the industry. Service businesses often achieve 50-70% gross margins. Retail typically ranges from 25-50%. Manufacturing may be 20-35%. Compare to your industry average rather than a universal standard.
Why is gross profit important?
Gross profit shows whether your pricing covers production costs. If gross profit is negative, you are selling below cost. It also reveals how much money is available to fund operations, pay employees, and invest in growth.
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