Profit Calculator
Calculate gross profit and profit margin.
Enter revenue and cost to calculate profit.
What This Calculator Does
Knowing you made money on a sale is one thing; knowing what share of the revenue that profit actually represents is another, and that second number is what tells you whether a price is really working for your business. This calculator takes your revenue and cost of goods sold and returns both the gross profit in dollars and the gross profit margin as a percentage of revenue. It doesn't calculate markup — that's profit expressed as a percentage of cost instead of selling price, and this project's separate Markup Calculator handles that version of the question.
How to Use It
Enter Revenue and Cost of Goods Sold, then click Calculate. The Profit Summary panel echoes both inputs back to you alongside Gross Profit and Gross Margin, so you can confirm the figures you entered while reading the result. If your cost of goods sold ever exceeds your revenue, the calculator won't stop you — it will simply return a negative profit and a negative margin, which is a legitimate way to see a loss-making price laid out in the same terms as a profitable one.
The Formula
Gross Profit is simply Revenue − Cost of Goods Sold. Gross Profit Margin is that profit expressed as a percentage of revenue: (Revenue − COGS) ÷ Revenue × 100. The one edge case worth knowing is what happens at zero revenue: rather than dividing by zero and returning an error or a NaN, the calculator treats zero revenue as a 0% margin, since there's no sale to express a percentage of.
A Worked Example
$1,000 in revenue against $600 in cost of goods sold leaves a Gross Profit of $400. Dividing that $400 by the $1,000 revenue gives a Gross Profit Margin of exactly 40% — meaning 40 cents of every revenue dollar is profit before any operating expenses, taxes, or overhead are considered. That 40% margin figure is what you'd compare against industry benchmarks or your own targets; the $400 profit figure alone doesn't tell you whether that's a good result without knowing the scale of the revenue behind it.
FAQ
- What is the difference between margin and markup?
- Margin is profit as a percentage of selling price, and that’s what this calculator shows. Markup is profit as a percentage of cost — use our separate Markup Calculator for that figure.
- How is profit margin calculated?
- Profit Margin = (Selling Price − Cost) ÷ Selling Price × 100%.