Below is a gross margin calculator to compute a company's gross margin using its revenue and gross profit. Enter a company's top line revenues and cost of goods sold (COGS, to compute gross profit) to compute its gross margin
Gross Margin Calculator
What is the Gross Profit Margin?
Gross profit margin or gross margin is the percentage left for a company to use after the expenses it needs to collect revenue. Gross profit is the total top-line sales of a company minus its cost of goods sold (COGS), or the costs to get that revenue.
Gross profit is computed before any operating expenses – sales, marketing, general and administrative, research and development, and any capital expenditures. Having a higher gross margin gives a company more room to build a solid business... although all sorts of high-quality businesses are build on top of lower and higher gross margins. Pure software companies, famously, have very high gross profit margins – generally only needing to scale compute power and similar charges to generate more revenue.
Gross Profit Margin Formula
The formula for gross profit margin is:
Gross\ Profit\ Margin=\frac{revenue-COGS}{revenue}Where:
- COGS: Cost of Goods Sold, abbreviated COGS, from the income statement
- Revenue: The company's top line sales
Margin Calculators
Now that you've tried the gross profit margin calculator, try some of the other margin calculators:
