Worked example
Revenue of ₹1,00,000 less ₹60,000 cost of goods gives ₹40,000 gross profit and a 40% gross margin.
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Revenue quality
Gross Margin Calculator
Measure gross profit, gross margin percentage, and the portion of revenue consumed by direct costs.
Business inputs
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Business result
Performance breakdown
₹
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Enter your business figures and calculate to view the result.
Formula
How it is calculated
Gross Margin = (Revenue − Cost of Goods Sold) ÷ Revenue × 100
Results are estimates based on the figures entered and may exclude taxes, fees, accounting adjustments, or employment rules not shown.
Frequently asked questions
What does gross margin show?
It shows how much revenue remains after direct costs, before operating expenses, interest, and tax.
What is the COGS ratio?
It is cost of goods sold divided by revenue—the complement of gross margin when no other direct adjustments apply.
Is a higher gross margin always better?
Usually it provides more room for operating costs and profit, but healthy levels vary widely by industry and business model.
Practical guidance
Use the Gross Margin Calculator with confidence
Measure gross profit and gross margin percentage. Review the example and limitations below before using the result for an important decision.
Assumptions and limits
The estimate excludes accounting adjustments and costs not entered, such as refunds, payment fees, credits, withholding, and jurisdiction-specific rules.
How to read the result
Calculations run from the values you enter using the formula described on this page. Inputs are processed in your browser and results are rounded for display.
Calculation methodology
Read our calculation methodology Educational estimate only. Verify regulated financial, tax, employment, or legal decisions with an official source or qualified professional.