Gross Profit Calculator
Work out gross profit and gross margin from revenue and cost of goods sold, then net profit and net margin after operating expenses. A helper works out cost of goods sold from stock and purchases. Free, no signup.
Full guide: Gross, operating and net margin formulas, with examples →
Waiting for the accountant to know last month's margin?
When sales, purchases and stock are in one system, gross margin by product is a report you open, not a spreadsheet you rebuild.
Why month-end shouldn't take three weeks Start free on MakeAffiliate link: if you sign up to Make through it, The Gantry may earn a commission at no extra cost to you. Bigger than one calculation? Book a free 20-minute systems review.
The gross profit formula
Gross profit = revenue − cost of goods sold. Gross margin = gross profit ÷ revenue × 100. Use revenue before GST.
Worked example: a month with S$180,000 of sales and S$126,000 cost of goods sold gives a gross profit of S$54,000, a 30% gross margin. After S$40,000 of operating expenses, profit is S$14,000, a 7.8% net margin.
Working out cost of goods sold
If you do not track cost per sale, use COGS = opening stock + purchases − closing stock. With S$120,000 opening stock, S$85,000 of purchases and S$110,000 closing stock, COGS is S$95,000. This only works if the stock counts are right, which is why businesses with stock move to a system that records cost on every delivery.
Gross margin vs net margin
Gross margin shows whether your pricing and buying work; net margin shows whether the business as a whole makes money after rent, salaries and everything else. A healthy gross margin with a thin net margin usually means overheads have grown faster than sales.
To see which products pull the gross margin down, paste your price list into the free profit margin calculator.
Questions
How do you calculate gross profit? Subtract cost of goods sold from revenue. S$180,000 of sales with S$126,000 of cost of goods sold is S$54,000 gross profit.
What is the difference between gross profit and net profit? Gross profit is after the direct cost of what you sold; net profit is after all expenses, including rent, salaries and other overheads.
What is a good gross profit margin? It depends on the trade. Compare your own margin month by month and against your overheads: gross profit has to cover them with room to spare.
More free calculators: break-even, gross profit, price increase, DSO, GST, invoice due date and all free tools.
