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A Gross Profit Calculator determines gross profit and margin by subtracting cost of goods sold from revenue, measuring basic business profitability.
Enter total revenue and cost of goods sold. The calculator shows gross profit, gross profit margin percentage, and markup.
Gross Profit is the amount a company has left after deducting the costs associated with making and selling its products (Cost of Goods Sold or COGS) from its total revenue. It indicates how efficiently a company uses its labor and supplies to produce goods.
The formula for Gross Profit is Total Revenue minus Cost of Goods Sold (COGS). You input your total sales revenue and the direct cost to produce those sales, and the calculator subtracts the costs from the revenue.
Gross Profit only considers the direct cost of producing goods (COGS). Net Profit subtracts all remaining expenses, including operating expenses, interest, taxes, and depreciation, providing a complete picture of actual earnings.
COGS includes direct costs such as raw materials, direct labor costs used to create the product, and factory overhead. It generally does not include indirect expenses like sales commissions, marketing, or distribution costs.
Gross Margin is Gross Profit expressed as a percentage of Revenue. It helps compare profitability across different companies or time periods regardless of sales volume. This calculator may provide this percentage automatically.
A negative Gross Profit occurs when the Cost of Goods Sold is higher than the Total Revenue. This means you are selling products for less than it costs to produce them.
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