Gross Margin Calculator — How to Calculate Gross Margin

Calculate gross profit and gross margin percentage from revenue and cost of goods sold (COGS). Example: revenue 10,000, COGS 6,000 → gross profit 4,000 and margin 40%. Runs in your browser; educational only — not business or investment advice.

How it works

Enter revenue and COGS. The tool computes gross profit and gross margin %. Markup vs margin and net profit stay in FAQ or related tools — not separate doorway URLs.

Formula and assumptions

Gross profit = Revenue − COGS. Gross margin % = (Gross profit ÷ Revenue) × 100. Assumptions:

Revenue and COGS use the same period and currency; taxes and operating expenses are not modeled.
COGS is treated as product cost only — SG&A and interest stay out of this calculator.
Results are educational illustrations, not forecasts or business advice.

Example

Example: revenue 10,000, COGS 6,000 → gross profit 4,000 → gross margin 40%.

When to use it

Classwork: practice the gross margin percentage formula with fixed revenue and COGS.
Rough product-level margin sketch before talking to an advisor (illustration only).
See gross profit and margin % together without a separate markup-only URL.

Frequently asked questions

What gross margin formula does this use?

Gross profit = Revenue − COGS. Gross margin % = Gross profit ÷ Revenue × 100.

What if COGS is greater than revenue?

Gross profit and margin become negative. That is allowed in the model so you can see loss-making cases — still not business advice.

Is this business advice?

No. Numbers are educational illustrations only and are not business, tax, or investment advice.

Gross margin vs markup?

Margin divides profit by revenue; markup divides profit by cost. This page focuses on margin; markup is only explained in FAQ, not a second tool URL.

Important notice

Gross margin results are educational illustrations only and are not business, financial, tax, or investment advice. Real businesses face fees, taxes, and cost classifications this page does not model.

References: Investopedia gross margin and gross profit definitions; standard (Revenue − COGS) / Revenue formula.

Questions or feedback

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