Sales Profit Margin Calculator

How to calculate gross profit :

This eazy profit & margin calculator will help you to save money and increase profits.

Profit :

Profit is the amount of money a company earns after subtracting money spent to run the business.

Profit margin :

Profit margin is a percentage that is based on the amount of revenue left over after some or all business-related expenses have been deducted. The higher the percentage is the more profitable your business.

Formula :

Revenue - Cost of Goods Sold = Gross Profit

Example :

Company Google sells mobile products. Recognizing revenues using the revenue recognition principle, it currently shows revenues in the amount of $50,000. The cost of the goods that it sells is $29,000.

Solution :

$50,000 - $29,000 = $21,000 gross profit

Next step, to determine the gross profit margin, divide gross profit by revenue:

$21,000 ÷ $50,000 = 0.42

Finally, multiply gross profit by 100 to determine gross profit margin percentage:

0.42 × 100 = 42% gross profit margin

This means that Company Google currently has a gross profit margin of 42%