Formula: Gross Margin (%) = ((Revenue − COGS) ÷ Revenue) × 100
COGS covers the direct costs of producing what you sell — materials, direct labor, and so on. In the example above, 200,000 in revenue against 120,000 in COGS leaves 80,000 in gross profit, a 40% gross margin.
This tool is provided for general informational purposes only and does not constitute financial advice. Verify results independently before making financial decisions.