Gross Margin
Calculator
Results
- Gross profit
- 90,000
- Gross margin (%)
- 36
- COGS as % of revenue
- 64
Results
| Gross profit | 90,000 |
| Gross margin (%) | 36 |
| COGS as % of revenue | 64 |
formula-map diagram
- Gross profit
- 90,000
- Gross margin (%)
- 36
- COGS as % of revenue
- 64
Formula breakdown
Formula
Gross margin % = (Revenue − COGS) ÷ Revenue × 100= 90000
Note
This is a simplified model. Results use standard textbook definitions and ignore taxes, seasonality, attribution lag, discounting and accounting policy differences. Use them as an estimate, not as accounting, tax or investment advice.
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See all →Frequently asked questions
What is gross margin and how is it calculated?+
Gross margin is the percentage of revenue remaining after subtracting the cost of goods sold (COGS): gross margin % = ((revenue - COGS) / revenue) x 100. It shows how efficiently a company turns sales into profit before accounting for operating expenses.
What's included in cost of goods sold (COGS)?+
COGS includes direct costs tied to producing or acquiring what's sold — raw materials, direct labor, and manufacturing overhead for a product business, or direct service delivery costs for a service business. It excludes indirect costs like marketing, rent for corporate offices, or administrative salaries.
How is gross margin different from gross profit?+
Gross profit is a dollar amount (revenue minus COGS), while gross margin expresses that same relationship as a percentage of revenue. Gross margin lets you compare profitability across companies or time periods of different sizes, while gross profit shows the absolute dollars generated.
What's considered a healthy gross margin?+
It varies widely by industry — software and digital products often have gross margins above 70-80% because reproduction costs are minimal, while grocery retail or manufacturing might run 20-30% due to high material and production costs. Compare your margin to industry benchmarks, not a universal number.
Why might gross margin decline even as revenue grows?+
Rising input costs, discounting to drive sales volume, or a shift in sales mix toward lower-margin products can all shrink gross margin even while total revenue increases. Tracking gross margin alongside revenue growth reveals whether that growth is actually profitable.