What is Gross Margin?

Gross Margin is the percentage of revenue that exceeds the cost of goods sold: (Revenue - COGS) / Revenue.

Margin Calculator

Determine COGS and equivalent markup from selling price and profit margin percentage.

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Parameters

R Reset

Selling Price ($)The retail or final selling price of the item.

$100.00

$0.01$10,000,000.00

Gross Margin (%)Gross margin percentage (profit divided by selling price).

25.0%

0.0%99.9%

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Cost of Goods Sold (COGS)

$75.00

Gross Profit$25.00

Equivalent Markup33.33%

Educational estimate. Not financial advice.

Result Interpretation

Profit margin of 25.0% is thin, leaving the business vulnerable to revenue fluctuations.

Mathematical Explanation

\text{COGS} = \text{Price} \times \left(1 - \frac{\text{Margin \%}}{100}\right)

For selling price $100 at margin 25%, COGS is $75.

Optimize your business pricing strategy by checking margins and COGS.

Input variables:

Learn to calculate your unit selling price based on profit margin targets, and determine cost of goods sold relationships.