Gross Profit Margin Calculator

What is Gross Margin?

Gross profit margin subtracts the cost of goods sold (COGS) from revenue and divides the result by revenue, expressing how efficiently a company produces its products or services before accounting for operating expenses. High gross margins are characteristic of software, pharmaceuticals, and branded consumer goods, where the cost to deliver each additional unit is low. Gross margin is often the first line of defence in profitability analysis: a declining gross margin can signal rising input costs, pricing pressure, or a less favourable product mix.