Toolivaro

Free Gross Profit Calculator

Calculate gross profit and gross margin from revenue and cost of goods sold, with a target-revenue mode.

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Total sales value.

Direct product or service costs only.

How is the result calculated?

Product-line review: revenue 100,000, COGS 64,000

A product line brings in $100,000 of revenue and its cost of goods sold is $64,000. Gross profit is 100,000 − 64,000 = $36,000. The gross margin is 36,000 / 100,000 = 36%. If the business wants $50,000 of gross profit at a 36% margin, it needs revenue of about $138,889.

Input Value
revenue 100000.00
cost 64000.00
Result Gross profit $36,000.00 · gross margin 36.0%

What is the formula and its assumptions?

Gross profit

gross profit = revenue − cost of goods sold

Symbol Meaning
revenue total sales value
cost of goods sold direct product or service costs only

Gross margin percentage

gross margin % = gross profit / revenue × 100

Symbol Meaning
gross profit revenue minus cost of goods sold
revenue total sales value

Revenue for a target gross profit

revenue = target profit / (margin% / 100)

Symbol Meaning
target profit desired gross profit
margin% planned gross margin percentage

What are the most common mistakes?

  • Using net profit instead of gross profit: margin on this page is revenue minus direct costs only.
  • Classifying shipping and storage as COGS when comparing against published industry gross margins, which usually exclude them.
  • Forgetting that margin can never exceed 100% — if a calculation says otherwise, the profit or the revenue figure is wrong.

What are the assumptions and limitations?

  • Gross profit excludes operating expenses, interest, and taxes — it is not the bottom line.
  • Results are estimates for planning and review, not professional financial advice.
  • The calculator assumes one combined cost figure; allocating shared overhead to products requires a costing study beyond this tool.

Where do the numbers come from?

Last reviewed August 4, 2026 · Version 1.0.0 · Toolivaro does not guarantee external content.

Business Profit Margin Calculator Calculate profit margin percentage, gross profit, and markup from revenue and cost, with rounding you control. Business Markup Calculator Calculate markup percentage, markup amount, and the selling price you need from any cost figure, with a margin cross-check. Business Break-Even Calculator Find how many units you must sell — and at what revenue — to cover your fixed costs, from price and variable cost. Business Cash Runway Calculator Estimate how many months your business can operate before running out of cash, from balance, expenses, and income.

Frequently asked questions

What counts as cost of goods sold?

COGS includes the direct costs of producing or acquiring what you sell: materials, product cost, and direct labor. Rent, salaries of non-production staff, marketing, and shipping to customers are operating expenses, not COGS — including them produces a net-profit figure instead.

What is a good gross margin?

There is no universal target. High-margin industries like software and services often exceed 70%, while groceries and commodity retail sit in the 20–30% range. Compare your margin against your own history and published industry benchmarks rather than a fixed number.

Can gross profit be negative?

Yes — when cost of goods sold exceeds revenue. The calculator reports a negative gross profit and a negative margin, which signals a pricing or cost problem before other expenses are even considered.

Found a mistake or have a correction? Report it — we review every correction.