Gross Profit Calculator
Calculate your gross profit and gross margin for any period. Enter your sales revenue and cost of goods sold (COGS), or let the calculator work out COGS from your opening stock, purchases and closing stock.
Calculate gross profit
Gross profit formula
Gross profit
Gross profit = revenue − cost of goods soldGross margin
Gross margin % = gross profit ÷ revenue × 100COGS from stock
COGS = opening stock + purchases − closing stockThe standard periodic-inventory method used by small retailers and wholesalers.
What goes into cost of goods sold?
| Include in COGS | Leave out (operating expenses) |
|---|---|
| Stock bought for resale | Rent of offices and shops |
| Raw materials and parts | Marketing and advertising |
| Direct production labour | Admin and sales salaries |
| Inbound freight and import duty | Software and utilities for the office |
Worked example
- Opening stock 15,000 + purchases 70,000 − closing stock 13,000 = COGS 72,000
- Gross profit = 120,000 − 72,000 = 48,000
- Gross margin = 48,000 ÷ 120,000 = 40%
Gross profit vs net profit
Gross profit shows how profitable your products are before overheads. Net profit subtracts every other cost — rent, wages, marketing, interest and tax — to show what the business really earns. A healthy gross margin with a poor net margin usually points to overheads that are too high. Use the Net Profit Calculator for the full picture.
Frequently asked questions
How do I calculate gross profit?
Subtract the cost of goods sold from revenue. Revenue of 120,000 and COGS of 72,000 gives 48,000 gross profit.
What is a good gross profit margin?
It varies widely: around 20–30% for groceries, 45–60% for clothing and 70–90% for software. Compare with your industry.
Are wages part of COGS?
Only wages for people who directly make the product or deliver the service. Office, sales and management salaries are operating expenses.
Related calculators
Results are for planning. Follow your local accounting standards for official accounts.