Gross Profit Calculator

Understanding Profit Margins

Gross profit measures your company's efficiency in producing and selling goods, while net profit shows your true bottom line after all expenses. Tracking these metrics helps you identify cost issues, price products effectively, and improve overall profitability.

How to Use This Calculator

Enter your total revenue, cost of goods sold (COGS), operating expenses, and tax rate. The calculator will show your gross profit, operating profit, and net profit with corresponding margins.

Key Profitability Formulas

These metrics help you understand where money is being made and lost in your business operations.

Essential Profit Metrics

• Gross Profit: Revenue minus direct production costs
• Gross Margin: Gross profit as percentage of revenue
• Operating Profit: Profit after operating expenses
• Net Profit: Final profit after all expenses and taxes

Industry Benchmark Margins

• Retail: 20-30% gross margin
• Manufacturing: 30-50% gross margin
• Software: 70-90% gross margin
• Restaurants: 10-15% net profit margin

Improving Your Margins

• Negotiate better supplier prices to reduce COGS
• Increase prices strategically
• Reduce waste in production
• Optimize operational efficiency
• Review tax strategies with professionals