gross profit margin ratio calculator
Gross Profit Margin Ratio Calculator

Gross Profit Margin Ratio Calculator

Financial Inputs

About Gross Profit Margin

Gross profit margin is a financial metric that indicates how efficiently a company uses labor and supplies in production. It's calculated as:

(Revenue - COGS) / Revenue × 100

This ratio shows the percentage of revenue that exceeds the cost of goods sold. Higher percentages indicate better profitability.

Profitability Results

Gross Profit Margin Ratio
30%
of revenue remains as gross profit

Gross Profit

$15,000

Revenue

$50,000

Total Costs

$35,000

Profitability Insights

  • Your gross profit margin is 30%
  • For every dollar of revenue, you retain $0.30 as gross profit
  • This margin is below the industry average of 40-60% for most businesses
  • Consider reviewing your production costs and pricing strategy

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