This calculator allows you to quickly calculate gross profit and gross margin from your revenue and cost of goods sold (COGS). Gross profit is one of the most important financial metrics for any business, as it shows how much money remains after direct costs are deducted.
Understanding gross profit is essential for evaluating product performance, setting pricing strategies, and ensuring long-term profitability. It helps you identify whether your products or services generate enough margin to cover operating expenses such as marketing, wages, and overheads.
This tool is widely used in ecommerce, retail, wholesale, and service-based businesses to compare product profitability and make better pricing decisions. It also provides a clear view of how efficiently your revenue is being converted into profit.
Formula: Gross Profit = Revenue − COGS
The gross profit figure shows the amount of money remaining after subtracting direct costs from revenue. The margin percentage shows how efficient your pricing is, allowing you to compare performance across different products or services.
The calculator subtracts your cost of goods sold (COGS) from your revenue to calculate gross profit. It then divides the result by revenue to calculate gross margin as a percentage.
This gives you both a monetary and percentage view of your profitability, which is critical for making informed pricing and business decisions.
Example 1: Revenue £2000, COGS £900 → Profit £1100 → Margin 55%
Example 2: Revenue £800, COGS £700 → Profit £100 → Margin 12.5%
Gross profit excludes overheads, while net profit includes all business expenses.
Yes, if your cost of goods sold exceeds your revenue.
It shows how efficiently your business converts revenue into profit.