Gross Profit Calculator
Calculate gross profit, gross profit margin, and analyze business profitability. Essential tool for financial analysis, business planning, and performance evaluation.
Select Calculation Type
Gross Profit Analysis
Primary Result
Gross Profit
Gross Margin
Revenue
Financial Analysis Breakdown
How the Gross Profit Calculator Works
Choose Calculation Type
Select what you want to calculate: gross profit, gross margin percentage, revenue, or cost of goods sold (COGS).
Enter Financial Data
Input your known financial values such as revenue, cost of goods sold, or gross profit based on your selected calculation type.
View Comprehensive Results
Get instant calculations with detailed financial breakdown including all key metrics and ratios for complete analysis.
Analyze Business Performance
Use the results to evaluate profitability, compare performance over time, and make informed business decisions.
Frequently Asked Questions
Gross profit is the profit a company makes after deducting the costs directly associated with making and selling its products. It's calculated as: Gross Profit = Total Revenue - Cost of Goods Sold (COGS). This metric shows how efficiently a company produces and sells its products.
Gross profit is the absolute dollar amount (Revenue - COGS), while gross margin is the percentage (Gross Profit ÷ Revenue × 100). Gross margin shows what percentage of revenue remains after covering direct costs, making it easier to compare profitability across different periods or companies.
COGS includes direct costs of producing goods: raw materials, direct labor, manufacturing overhead, and freight-in costs. It excludes indirect expenses like marketing, administration, rent, and utilities. For service businesses, include direct labor and materials used to deliver services.
Good gross margins vary by industry. Software companies often have 70-90% margins, while grocery stores may have 20-30%. Manufacturing typically ranges from 25-35%. Compare your margins to industry benchmarks and focus on improving efficiency and pricing strategies.
Improve gross margins by: 1) Increasing prices strategically, 2) Reducing COGS through better supplier negotiations, 3) Improving operational efficiency, 4) Focusing on higher-margin products, 5) Reducing waste and improving quality control, 6) Automating production processes where possible.