Gross Profit Margin and Markup Calculator

Measure product-level gross economics with separate margin and markup results.

Gross profit in currency
Margin on revenue
Markup on cost

How to Calculate Gross Profit Margin

Use revenue and cost figures from the same scope and reporting period.

1

Choose a display currency; currency choice changes formatting, not exchange rates.

Keep the cost basis consistent

Inventory accounting and cost allocation policies can change reported COGS. Use the figure from the same records as revenue.

What Gross Margin and Markup Mean

Gross margin measures gross profit relative to revenue. Markup measures the same gross profit relative to cost, so the percentages are normally different. If COGS exceeds revenue, gross profit and both rates are negative. Markup is undefined when COGS is zero.

Profit Margin Examples

Positive gross margin

Revenue and direct cost

revenue:1000
costOfGoodsSold:600

Gross margin

40% margin; 66.6667% markup

Gross profit is 400. Dividing by revenue gives margin; dividing by COGS gives markup.

Gross loss

Revenue and direct cost

revenue:100
costOfGoodsSold:125

Gross margin

-25% margin; -20% markup

Direct cost exceeds revenue by 25, so gross profit is negative.

Do not substitute net profit

Net margin requires operating expenses and other items that this gross-margin calculator intentionally excludes.

Frequently Asked Questions

No. Margin divides gross profit by revenue; markup divides gross profit by cost.

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Gross Profit, Margin, and Markup Formulas

The model follows the standard income-statement relationship between revenue, cost of goods sold, and gross profit.

Formula

gross profit ​=​ revenue − cost of goods sold

Gross profit

gross profit ​=​ revenue − cost of goods sold

Gross margin

gross margin % ​=​ gross profit ​÷​ revenue ​×​ 100

Markup

markup % ​=​ gross profit ​÷​ cost of goods sold ​×​ 100

Scientific Background

Results assume revenue and COGS are correctly classified and measured on the same basis. The calculator does not infer returns, discounts, inventory adjustments, overhead allocation, or accounting policy.