Gross Margin Calculator
Calculate gross profit and gross margin percentage from revenue and cost of goods sold.
Gross Margin Result
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Run the calculation to see the margin breakdown.
Quick Answer
Subtract COGS from revenue to get gross profit. Divide gross profit by revenue to get gross margin percentage.
How to Calculate Gross Margin
- Enter revenue.
- Enter cost of goods sold.
- Click Calculate.
- Review gross profit and margin percent.
Formula
Gross profit = revenue - COGS
Gross margin % = gross profit / revenue x 100
Worked Examples
Example 1: 75,000 revenue and 45,000 COGS gives 30,000 gross profit.
Example 2: A higher COGS figure lowers the margin percentage.
Example 3: If revenue falls and COGS stays fixed, gross margin shrinks quickly.
How to Interpret Your Results
| Gross margin % | Meaning | Action |
|---|---|---|
| Low | The business may have thin profit after product cost | Review pricing or supplier cost |
| Moderate | The margin is in a workable range | Compare by category or competitor |
| High | The margin is strong | Check whether overhead or returns still erode profit |
Frequently Asked Questions
Gross profit is a dollar amount. Gross margin percentage compares that profit to revenue.
It shows how efficiently a business turns sales into profit before operating expenses.
Yes. Use the same time period for both revenue and COGS.
Related Calculators
Detail About Gross Margin Calculator
This page helps you check product profitability by turning revenue and direct cost into gross profit and a margin percentage.
References
- OmniCalculator reference page
- Gross margin is a core profit metric for product businesses.
- Last reviewed: March 2026.