Free Profit Calculator
The whole-business view rather than the per-item one. Enter revenue and cost for a period and get the gross profit, the profit margin, and what proportion of your revenue is being eaten by cost.
Total sales for the period.
Total cost for the same period.
Fill in the fields and the result appears here as you type.
How gross profit is calculated
Gross profit is total revenue minus total costs, and the gross margin is that profit as a percentage of revenue: profit ÷ revenue × 100.
This is the whole-business view rather than the single-item one. Which costs you include decides what the answer means — put in only the cost of goods and you get gross profit; put in every cost and you get closer to net.
A worked example
A month with 85,000 of revenue against 61,000 of costs.
- Gross profit
- 85,000 − 61,000 = 24,000
- Gross margin
- 24,000 ÷ 85,000 × 100 = 28.24%
The percentage is the number to track month to month. Revenue can grow while margin falls, and that combination is how a business gets busier and poorer at the same time.
Questions about profit
What is the difference between gross and net profit?
Gross profit deducts the direct cost of what you sold. Net profit deducts everything else as well — overheads, salaries, rent, interest and tax. A healthy gross margin with no net profit means the overheads, not the pricing, are the problem.
Should I include VAT in revenue?
No. VAT collected is not yours; it is owed to the tax authority. Use net figures on both sides, or the margin will be overstated. Use the VAT calculator to strip tax out of gross totals first.
Why is my margin falling while sales rise?
Usually discounting, a shift in the mix towards lower-margin lines, or supplier costs rising faster than prices. Because the margin is a ratio, growing revenue hides all three — which is exactly why it is worth calculating each month rather than at year end.