Gross Margin Calculator — Product Profitability
Free gross margin calculator. Calculate gross margin percentage from revenue and COGS.
Formula: (Revenue - COGS) / Revenue × 100
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What Is This Calculator?
Gross margin is the percentage of revenue that exceeds the cost of goods sold. It measures how efficiently a business produces its goods or delivers its services. Higher gross margins mean more money left to cover operating expenses and generate profit.
How to Calculate
To calculate gross margin: 1) Find total revenue. 2) Find cost of goods sold (COGS). 3) Subtract COGS from revenue. 4) Divide by revenue. 5) Multiply by 100. Formula: Gross Margin = (Revenue − COGS) / Revenue × 100.
Examples
Example: Revenue of $100,000 with COGS of $40,000. Gross Margin = ($100,000 − $40,000) / $100,000 × 100 = 60%.
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QuickBooks automatically calculates gross margin from your income statement data.
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