Gross Margin Calculator
Gross margin shows what is left after the direct cost of delivering your product or service, before overheads. Enter revenue and cost of sales.
Gross profit
$110,000.00
Gross margin
44%
Markup on cost
78.57%
Cost of sales ratio
56%
How this was worked out
- Step 1Gross profit = 250,000 − 140,000 = $110,000.00
- Step 2Gross margin = 110,000 ÷ 250,000 × 100 = 44%
Formula
Gross margin = ((revenue − COGS) ÷ revenue) × 100
Example
Input
Revenue $250,000, COGS $140,000
Result
Gross margin 44%
Frequently asked questions
Direct costs: materials, direct labour, packaging and shipping. Overheads such as rent and marketing are excluded.
Gross margin stops at direct costs. Net margin also deducts overheads, tax and interest.
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