Finance & Economics / Business & Investment
Gross Margin Calculator
Total sales or price per unit
Direct costs to produce/acquire
Understanding Gross Margin
Formulas:
- Gross Profit = Revenue - COGS
- Gross Margin % = (Gross Profit / Revenue) × 100
- Markup % = ((Revenue - COGS) / COGS) × 100
Difference between Margin and Markup:
- Margin: Profit as % of selling price (what you keep)
- Markup: Profit as % of cost (how much you added)
Industry benchmarks: Software (80-90%), Retail (20-50%), Manufacturing (25-35%), Restaurants (60-70%)