Last updated October 13, 2026 · Report an error
Gross profit — revenue minus cost of goods sold — is the dollar-amount counterpart to gross margin percentage, distinct from the Profit Margin Calculator which expresses this relationship purely as a percentage.
This calculator finds both your gross profit (in dollars) and gross margin (as a percentage) from revenue and cost of goods sold.
How it works
Enter your revenue and cost of goods sold. The tool subtracts the two to find gross profit, then divides by revenue for the gross margin percentage.
- Enter revenue ($).
- Enter cost of goods sold ($).
- Click Calculate to see your results.
Examples
A retail example
$500,000 in revenue with $300,000 in cost of goods sold gives $200,000 gross profit (40% gross margin).
Who should use it
- Quickly finding gross profit and margin from a revenue and COGS figure.
- Comparing gross margin percentage across products or time periods.
Industry applications
- Retail and e-commerce
- Financial analysis and accounting
Advantages
- Shows both the dollar amount and percentage in one calculation.
- Simple, foundational profitability metric.
Limitations
- Doesn't account for operating expenses below the gross profit line — pair with a net profit margin calculation for the full picture.
Common mistakes to avoid
- Including indirect/operating expenses (like marketing or admin salaries) in COGS, which understates gross profit.
- Confusing gross profit (a dollar figure) with gross margin (a percentage) when comparing businesses of different sizes.
Best practices
- Use gross margin percentage (not the raw gross profit dollar amount) when comparing profitability across businesses or periods of different sizes.
Tips
- Track gross margin percentage over time — a declining margin (even with rising revenue) can signal rising production costs or pricing pressure worth investigating.
Frequently asked questions
Yes, with no signup and no limit on how many calculations you run.
Gross profit only subtracts the direct cost of producing goods sold (COGS); net profit subtracts every other business expense too (rent, salaries, marketing, taxes, etc.), giving the true bottom-line profit.
COGS includes the direct costs of producing what you sold — raw materials, direct labor, and manufacturing overhead directly tied to production — but not indirect expenses like marketing or administrative salaries.