Gross Profit Calculator

Use this calculator to estimate gross profit.

What this calculator does

The gross profit calculator helps estimate how much profit remains after subtracting cost of goods sold from revenue.

It is useful for:

• margin analysis
• product planning
• pricing review
• business forecasting

Formula

Gross Profit = Revenue - Cost of Goods Sold

Where:

• Revenue = total income from sales
• Cost of Goods Sold = direct cost of producing or buying what was sold
• Gross Profit = profit before overhead and operating expenses

Example calculation

If:

• Revenue = 100000
• Cost of goods sold = 60000

Then:

• Gross profit = 100000 - 60000
• Gross profit = 40000

What is gross profit?

Gross profit is the amount left after direct costs are deducted from revenue.

Why gross profit matters

This calculation helps businesses:

• understand core profitability
• compare products or services
• support pricing decisions
• track financial performance

When to use this calculator

Use this calculator when you want to:

• review profit before overhead
• compare product lines
• assess pricing changes
• support financial reporting

Common mistakes

Common mistakes include:

• confusing gross profit with net profit
• excluding some direct costs
• mixing time periods
• using revenue after discounts without matching costs

Gross profit vs net profit

These are closely related.

• Gross profit shows profit after direct costs only
• Net profit shows profit after all expenses

Related calculations

You may also want to use:

• Gross Margin Calculator
• Net Profit Calculator
• Contribution Margin Calculator

FAQs

What does this calculator do?

It helps you estimate gross profit.

Why is gross profit important?

It shows how much money remains after direct costs are covered.

Is gross profit the same as gross margin?

No. Gross profit is a value amount, while gross margin is a percentage.