Business
Calculate gross profit, gross margin, and the cost-of-goods ratio from revenue and cost of goods sold.
Results update as you type. No calculate button. All calculations run locally in your browser.
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Gross profit is revenue minus cost of goods sold only — operating expenses are not deducted here.
The two bars together equal revenue. A longer gross-profit bar means a higher margin.
| Revenue | Gross margin |
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Cost of goods sold is held at the value above; only revenue changes across rows.
Gross profit = revenue − cost of goods sold. Gross margin = gross profit ÷ revenue × 100%. COGS ratio = cost of goods sold ÷ revenue × 100%.
Revenue $100,000, cost of goods sold $60,000: gross profit = $100,000 − $60,000 = $40,000, gross margin = $40,000 ÷ $100,000 × 100% = 40.00%, and COGS ratio = 60.00%.
Gross profit excludes operating expenses such as payroll, rent, marketing, interest, and tax. A healthy gross margin can still accompany an operating loss once those costs are counted — use the profit calculator for the fuller picture.
Gross profit = revenue − cost of goods sold; gross margin = gross profit ÷ revenue × 100%. It measures what is left after the direct cost of what you sold.
Net margin deducts everything, including operating expenses, interest, and tax. Gross margin stops at cost of goods sold, so it is higher and says nothing about overhead.
Yes, if cost of goods sold exceeds revenue — each sale loses money before any operating cost is even counted. That needs a price or sourcing fix, not cost-cutting elsewhere.
Direct costs of producing or buying what you sold: materials, direct labor, and wholesale purchase cost. Rent and marketing are operating expenses, not COGS.
Because COGS is held fixed in the scenario table. In reality COGS usually rises with volume, so read that table as a what-if, not a forecast.
Generally, but not at any price: raising prices to lift margin can cut volume enough to reduce total gross profit. Margin percent and total profit must be read together.
Results are estimates only and do not constitute professional advice.