Gross Margin Calculator
Calculate company or product gross margin ratio to evaluate production efficiency.
Calculation Inputs & Parameters
120000
(Default)
72000
(Default)
Gross Margin Ratio
40.00%
Gross Profit
$48,000
COGS Percentage of Revenue
60.00%
Total Revenue
$120,000
How the Calculation Works
Measures the proportion of money left over from revenues after accounting for direct production costs.
Formula: Gross Margin % = [(Revenue - COGS) / Revenue] × 100
Practical Worked Example
Given Inputs: Revenue: 100,000 | COGS: 60,000
Calculated Output: Gross Profit: 40,000 | Margin: 40%
- (100,000 - 60,000) / 100,000 = 40%.
Pro Tip: Compare your margin against industry benchmarks to understand if your production costs are competitive.