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# Gross Profit Margin Calculator:

Gross profit is equal to total sales revenue less cost of goods sold. Sales revenue is the revenue that is generated through the sales of the products or provision of services. Cost of goods sold is the cost of products that are sold or the cost of the services that are provided to generate revenue . This figure is very important for the management of the business because it covers all indirect expenses (selling and marketing expenses etc.) and also provide for net profit. The relationship between gross profit, cost of goods sold and and the sales revenue may be expressed by the following equation:

Gross profit = Revenue - Cost of goods sod

### Example:

If revenue is \$100 and cost of goods sold is \$60 the gross profit would be \$40 (\$100 - \$60). The gross profit margin or gross profit ratio would be 40% [(40/100)*100].

Use our free gross profit margin calculator to calculate gross profit margin rate.

## How to Use Gross Profit Margin Calculator:

1. Enter in sales (Total Revenue).

2. Enter in cost of goods sold (COGS).

3. Press calculate button.

4. Wait for the result. Our free gross profit margin calculator will calculate the gross profit ratio for you.

Gross Profit Margin Calculator
Sales (Total Revenue):
Cost of Goods Sold (COGS):
Gross Profit Margin

We also have article about gross profit ratio.

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