Gross Profit Calculator | Margin & Markup Tool
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Business Profitability Tool

Gross Profit Calculator

Calculate gross profit, gross margin, markup, total revenue, and cost of goods sold using your business figures or individual product data.

Enter Your Business Data

Choose a calculation method and enter your financial information.

$
Total sales before deducting product costs.
$
Direct costs of producing or purchasing the goods you sold.
$
$
Business Fundamentals

What Is Gross Profit?

Gross profit measures how much money a business keeps after paying the direct costs required to produce or purchase its sold products.

Gross profit is the difference between a company's total sales revenue and its cost of goods sold. It provides a clear view of how efficiently a business prices its products and manages direct production or purchasing costs.

The cost of goods sold may include raw materials, product purchasing costs, manufacturing labor, packaging, and other expenses directly connected to the products sold. General business expenses such as office rent, advertising, administrative salaries, taxes, and interest are normally not included in gross profit.

Gross Profit Formula
Gross Profit = Revenue − Cost of Goods Sold

For example, if a business generates $100,000 in revenue and spends $60,000 on the products it sold, its gross profit is $40,000.

Profitability Metrics

What This Calculator Measures

Get more than a basic profit amount by reviewing the most important product profitability indicators.

Gross Profit

The total amount remaining after subtracting direct product costs from sales revenue.

Gross Profit Margin

The percentage of every sales amount that remains after covering the cost of goods sold.

Product Markup

The percentage added to product cost when determining a selling price.

How It Works

How to Use the Gross Profit Calculator

Calculate your business or product profitability in four simple steps.

Select a Method

Choose Revenue & COGS for business totals or Per Product for unit-based calculations.

Enter Your Values

Add your revenue and costs, or provide selling price, unit cost, and units sold.

Choose Currency

Select the currency symbol you want to display in your calculation results.

Review the Results

View gross profit, margin, markup, cost ratio, revenue, and product-level profit.

Practical Example

Gross Profit Calculation Example

See how the calculation works for an online retail business.

Online Store Example

  • Total revenue $80,000
  • Cost of goods sold $48,000
  • Gross profit $32,000
  • Gross profit margin 40%
  • Markup on cost 66.67%

What the Results Mean

The business keeps $32,000 after paying the direct cost of the products sold. Its 40% gross margin means that $0.40 from every $1.00 of revenue remains before operating expenses.

The 66.67% markup shows how much profit was added above product cost. Margin and markup are related, but they use different amounts as their calculation base.

Important Difference

Gross Margin vs. Markup

Margin and markup both measure profitability, but they should not be used interchangeably.

Metric Calculation Base Formula Main Purpose
Gross Margin Total revenue Gross Profit ÷ Revenue × 100 Measures profit retained from sales
Markup Cost of goods sold Gross Profit ÷ COGS × 100 Helps set a selling price above cost
Frequently Asked Questions

Gross Profit Calculator FAQs

Find clear answers to common questions about gross profit, margin, markup, and business costs.

Gross profit is the amount remaining after subtracting the cost of goods sold from total sales revenue. It shows how much a business earns from its products before operating expenses are deducted.
Subtract the cost of goods sold from total revenue. For example, revenue of $50,000 minus COGS of $30,000 produces a gross profit of $20,000.
A good margin depends on the industry, business model, product type, and operating costs. Retail businesses may have different target margins than software companies, manufacturers, or restaurants. The most useful comparison is often with similar businesses and your own historical performance.
COGS can include product purchase costs, raw materials, manufacturing labor, factory-related costs, packaging, and other expenses directly connected to producing the goods sold.
No. Gross profit generally does not deduct expenses such as marketing, office rent, administrative salaries, insurance, taxes, interest, or other overhead costs.
Gross profit subtracts only the direct cost of goods sold. Net profit subtracts COGS as well as operating expenses, interest, taxes, and other business costs.
Markup divides profit by cost, while margin divides profit by revenue. Because cost is usually lower than revenue, the markup percentage is commonly higher than the margin percentage.
Important: This calculator provides estimates for general business planning. Accounting treatment can vary by industry, business structure, and jurisdiction. Consult a qualified accountant when preparing official financial statements or tax records.