Gross Profit Calculator
Gross Profit Calculator subtracts cost of goods sold from revenue and also expresses that difference as a percentage of revenue. Gross profit covers direct product or service costs under the chosen accounting definition; it does not subtract operating expenses, interest, or taxes. Consistent revenue recognition and COGS classification are essential for meaningful comparison.
Runs locally — files stay on your deviceWhat are gross profit and gross margin on 200 revenue and 120 COGS?
Gross profit is 80 and gross margin is 40%.
Formula: 200 − 120 = 80; 80 ÷ 200 × 100 = 40%
Gross profit is revenue minus cost of goods sold
Gross profit is a currency amount. Gross margin is gross profit divided by revenue. Neither is the same as net profit because expenses below gross profit remain.
How it works
Enter revenue and COGS for the same period and scope. Use gross profit to see the amount left for operating expenses and gross margin to compare relative performance.
Key concepts
Amount and percentage answer different questions
Gross profit shows currency available; gross margin normalizes it against revenue.
COGS policy matters
Labor, fulfillment, hosting, and other costs can be classified differently across businesses.
When to use it
- Check product or company gross economics.
- Compare gross margin across consistent periods.
- Separate direct-cost performance from operating expenses.
When not to use it
- Do not call gross profit net income.
- Do not include unrelated periods or currencies.
- Do not change COGS classification between comparisons.
Worked examples
Standard case
- Input
Revenue 200; COGS 120- Expected output
Gross profit 80; margin 40%
Eighty remains before operating costs.
Break-even gross result
- Input
Revenue 100; COGS 100- Expected output
0 profit; 0% margin
Direct costs consume all revenue.
Negative gross profit
- Input
Revenue 90; COGS 110- Expected output
−20; −22.22%
Direct cost exceeds revenue.
Common mistakes
Subtracting all expenses as COGS
The metric becomes operating or net style instead. Correction: Follow one documented COGS definition.
Comparing amount without scale
Larger businesses naturally show larger amounts. Correction: Review gross margin alongside gross profit.
Ignoring returns and discounts
Gross revenue may overstate the realized base. Correction: Use the appropriate recognized revenue figure.
Best practices
- Reconcile revenue and COGS to the same period.
- Document cost classification.
- Review gross and operating metrics together.
Related operations and differences
Markup Calculator
Choose Markup Calculator when you need to calculate markup from cost and selling price.; use Gross Profit Calculator specifically for gross profit.
Profit Margin Calculator
Choose Profit Margin Calculator when you need to calculate profit as a percentage of revenue.; use Gross Profit Calculator specifically for gross profit.
Revenue Growth Calculator
Choose Revenue Growth Calculator when you need to measure growth between two revenue periods.; use Gross Profit Calculator specifically for gross profit.
Burn Rate Calculator
Choose Burn Rate Calculator when you need to estimate average monthly cash burn.; use Gross Profit Calculator specifically for gross profit.
Business Runway Calculator
Choose Business Runway Calculator when you need to estimate how many months current cash can cover.; use Gross Profit Calculator specifically for gross profit.
Customer Churn Calculator
Choose Customer Churn Calculator when you need to calculate the percentage of customers lost.; use Gross Profit Calculator specifically for gross profit.
Limitations and privacy
- The result is a simplified management estimate, not accounting, tax, legal, or investment advice.
- The page does not apply accounting standards or classify costs.
- Revenue of zero yields no meaningful gross-margin percentage.
Business figures are calculated locally in this browser and are not uploaded.
Frequently asked questions
What is gross profit?
Revenue minus cost of goods sold.
What is gross margin?
Gross profit divided by revenue, expressed as a percentage.
Does gross profit include operating expenses?
No. Those are normally below the gross-profit line.
Can gross profit be negative?
Yes, when COGS exceeds revenue.