A clear result in a few inputs.
- Enter the requested values.Use consistent units and the real values for your scenario.
- Read the main result and breakdown.NumLuma recalculates immediately when an input changes.
- Check the formula and assumptions.Use the supporting context before making a real-world decision.
What this calculator does
Gross profit is the money left after subtracting cost of goods sold from revenue. Gross margin expresses that gross profit as a percentage of revenue. These metrics sit above operating expenses, taxes and other costs in a typical income statement.
What to know before you use the result
- Use revenue and COGS from the same accounting period.
- Gross profit is a dollar amount; gross margin is a percentage.
- Operating expenses are not subtracted when calculating gross profit.
Common mistakes to avoid
- Subtracting all business expenses and calling the result gross profit.
- Confusing gross margin with markup on product cost.
- Mixing net revenue with COGS from a different reporting basis.
Where this calculation is useful
Product economicsFinancial reportingPricing reviewsBusiness analysis
Related concepts
gross profitgross marginCOGSincome statement