Gross Profit Calculator
Gross profit is what's left of revenue after the direct cost of producing your goods or services. It shows how efficiently you turn sales into money before overhead.
Your details
- Gross margin
- 40.00%
Gross profit vs COGS
- Gross profit
- $40,000.0040%
- Cost of goods sold
- $60,000.0060%
Formula
Gross profit = revenue − cost of goods sold (COGS). Gross margin = gross profit ÷ revenue, expressed as a percentage.
How it works
Gross profit funds everything else — salaries, rent, marketing, and net profit. A higher gross margin gives you more room to invest and absorb shocks, which is why margin, not just revenue, is what investors scrutinize.
Frequently asked questions
What's the difference between gross and net profit?⌄
Gross profit subtracts only the direct cost of goods sold. Net profit also subtracts operating expenses, interest, and taxes — it's what's truly left at the bottom.
What counts as COGS?⌄
The direct costs of producing what you sell — materials, direct labor, and manufacturing. It excludes overhead like marketing, admin, and rent.
What is a good gross margin?⌄
It varies hugely by industry — software often exceeds 70–80%, while retail may run 20–40%. Compare against peers in your sector rather than an absolute target.
Sources & methodology
Revenue − COGS, and the resulting margin. Excludes operating expenses, interest, and taxes.
Embed this calculator⌄
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