Gross Profit Calculator
Measure core business trading profitability by deducting direct product costs from gross sales revenue. Gross profit indicates funds available to cover operating overheads.
How it works
Gross profit = total revenue − cost of goods sold (COGS). Gross margin = (gross profit ÷ total revenue) × 100. For instance, generating 50,000 in revenue with 32,000 in COGS produces a gross profit of 18,000 and a 36% gross margin.
Questions
What items are included in cost of goods sold (COGS)?
COGS includes direct material purchases, factory labor, manufacturing supplies, and freight-in directly required to make or acquire merchandise.
How does gross profit differ from net profit?
Gross profit deducts only direct production costs from revenue. Net profit further subtracts indirect overheads, rent, marketing, taxes, and interest.
Can gross profit be negative?
Yes. If direct production or acquisition costs exceed total sales revenue, gross profit will be negative, signaling unsustainable unit economics.
Results are estimates for planning. They are not tax, legal or financial advice.
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