BUSINESS FINANCE CHANNEL
Gross Margin Calculator
Calculate the fundamental profit margin of your physical products before general operating overhead.
Calculator Variables
Calculation Overview
Calculate your gross profit margin percentage based on revenues and cost of goods sold (COGS).
Mathematical Model & Formula
Gross Margin % = ((Revenue - COGS) / Revenue) * 100
Divides gross profit (revenue minus raw product production outlays) by total revenue to determine product pricing health.
Variables Defined:
Worked Example Scenario
Scenario: Sales of $50,000 with COGS of $20,000.
- Gross profit = $50,000 - $20,000 = $30,000
- Margin = ($30,000 / $50,000) * 100
Result: Gross margin is 60.00%.
Frequently Asked Questions
How is gross margin different from markup?
Gross margin compares profit to the selling price, while markup compares profit to the wholesale purchase cost.