Gross Margin Calculator

Gross Margin is evaluated from Net Revenue, Cost of Goods Sold and Gross Profit. The calculation reports Gross Profit, Gross Margin% and COGS.

Results

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About the Gross Margin Calculator

Gross Margin is treated here as a quantitative relation between Net Revenue, Cost of Goods Sold, Gross Profit and Operating Expenses and Gross Profit, Gross Margin%, COGS and COGS as% of Revenue.

The calculator uses a multi formula configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
Gross Profit = Revenue - COGS
Gross Margin% = Gross Profit / Revenue x 100
COGS% = COGS / Revenue x 100
Operating Income = Gross Profit - Operating Expenses
Operating Margin% = Operating Income / Revenue x 100

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

Gross Profit = Revenue - COGS
Gross Margin% = Gross Profit / Revenue x 100
COGS% = COGS / Revenue x 100
Operating Income = Gross Profit - Operating Expenses
Operating Margin% = Operating Income / Revenue x 100

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: SaaS company: $4.2M revenue, $756,000 COGS (hosting, support), $2.1M operating expenses

Inputs

revenue: 4200000 cogs: 756000 operating_expenses: 2100000
Gross Profit: $3,444,000. Gross Margin%: 82%. COGS: $756,000. COGS as% of Revenue: 18%. Operating Income: $1,344,000. Operating Margin%: 32%

With Net Revenue = 4,200,000, Cost of Goods Sold = 756,000 and Operating Expenses = 2,100,000 as the stated inputs, the result is Gross Profit = $3,444,000, Gross Margin% = 82% and COGS = $756,000. Each value corresponds to the declared output fields.

Example 2: Restaurant chain: $3.2M revenue, food cost $1.12M (35%), labor separate

Inputs

revenue: 3200000 cogs: 1120000 operating_expenses: 1440000
Gross Profit: $2,080,000. Gross Margin%: 65%. COGS: $1,120,000. COGS as% of Revenue: 35%. Operating Income: $640,000. Operating Margin%: 20%

With Net Revenue = 3,200,000, Cost of Goods Sold = 1,120,000 and Operating Expenses = 1,440,000 as the stated inputs, the result is Gross Profit = $2,080,000, Gross Margin% = 65% and COGS = $1,120,000. Each value corresponds to the declared output fields.

Example 3: Retail clothing store: $850,000 revenue, wholesale cost $390,500

Inputs

revenue: 850000 cogs: 390500 operating_expenses: 350000
Gross Profit: $459,500. Gross Margin%: 54.06%. COGS: $390,500. COGS as% of Revenue: 45.94%. Operating Income: $109,500. Operating Margin%: 12.88%

With Net Revenue = 850,000, Cost of Goods Sold = 390,500 and Operating Expenses = 350,000 as the stated inputs, the result is Gross Profit = $459,500, Gross Margin% = 54.06% and COGS = $390,500. Each value corresponds to the declared output fields.

Example 4: Manufacturing company: $12.5M revenue, COGS $9.5M (materials, labor, overhead)

Inputs

revenue: 12500000 cogs: 9500000 operating_expenses: 1750000
Gross Profit: $3,000,000. Gross Margin%: 24%. COGS: $9,500,000. COGS as% of Revenue: 76%. Operating Income: $1,250,000. Operating Margin%: 10%

With Net Revenue = 12,500,000, Cost of Goods Sold = 9,500,000 and Operating Expenses = 1,750,000 as the stated inputs, the result is Gross Profit = $3,000,000, Gross Margin% = 24% and COGS = $9,500,000. Each value corresponds to the declared output fields.

Common Use Cases

  • Calculate gross margin % for financial analysis
  • Determine gross profit from revenue and cost of goods sold
  • Compare gross margins across products or time periods