Gross margin calculator
How much of the entered revenue remains after the cost of goods or services sold?
A teaching example in the units shown below.
These authored example inputs illustrate the calculation. Replace them with your own documented amounts, periods and rates; they are not measured industry averages or available offers.
Use one consistent period. Exclude pass-through sales tax and subtract returns and allowances.
Enter the complete cost of delivering those sales. Classify costs consistently with the operating-expense input.
Your entered scenario
Starting exampleCalculation updated using the entered assumptions.
Formula and interpretation
Gross profit = revenue − cost of sales
Gross margin = gross profit ÷ revenue
Markup = gross profit ÷ cost of sales
Margin uses selling revenue as its denominator; markup uses cost. Losses remain negative.
Use one consistent period or sold unit and a documented cost-of-sales boundary.
Definitions and sources
These references support the definitions and calculation boundaries. The starting numerical example is authored for arithmetic; each available business preset has its own evidence and limitations.
- Financial-statement definitions — U.S. Securities and Exchange Commission. Supports the income-statement sequence and the distinction between earnings and cash flows. Accessed September 5, 2026.
Continue with a related calculation
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Review startup uses, staffing, annual results and input evidence alongside the relevant worksheets. A single calculation does not replace local quotes or a dated cash schedule.
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