Gross Profit Calculator: Easily Measure Your Business Profitability
Gross profit equals your sales revenue minus the cost of goods sold. Enter both numbers, press calculate, and the tool shows the difference in dollars. U.S. small firms average a 30 % gross margin, so if your margin is higher, you outperform peers (U.S. SBA, 2022).
Gross Profit Calculator
Gross Profit:
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How to use the tool
Enter Sales Revenue. Type the total income from core operations, e.g., 178 500 or 512 300.
Enter Cost of Goods Sold (COGS). Add all direct production costs, e.g., 96 000 or 342 750.
Get your result. Click “Calculate” to display gross profit in U.S. dollars.
Monthly tracking helps spot cost creep early (CFO.com, 2022).
FAQ
What is gross profit?
Gross profit is the money left after you subtract COGS from sales revenue. “Gross profit represents ‘the excess of revenue over the cost of sales’” (IFRS Conceptual Framework, 2021).
Why track gross profit regularly?
Regular monitoring reveals cost spikes and pricing issues early, improving decisions on expenses and strategy (CFO.com, 2022).
What counts as a good gross profit margin?
Anything above your industry average—U.S. small manufacturers post around 32 % while grocery stores average 26 % (U.S. Bureau of Labor Statistics, 2023).
Can gross profit be negative?
Yes. Negative gross profit means costs exceeded revenue, a warning to raise prices or cut costs (Investopedia, 2023).
Is gross profit margin the same as markup?
No. Margin divides gross profit by revenue, while markup divides gross profit by COGS (Harvard Business Review, 2021).
How do service businesses adapt the formula?
Replace COGS with direct service costs like labor and materials, then apply the same subtraction (SBA Service Sector Guide, 2022).
How often should I recalculate gross profit?
Calculate at least monthly; weekly reviews are common in high-volume retail (National Retail Federation, 2022).
Does gross profit include taxes or overhead?
No. Gross profit stops at direct production costs; taxes, rent, and administration appear later in net profit (IRS Publication 535, 2023).
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