Gross Margin Calculator
This calculator computes gross profit and gross margin using standard accounting definitions: gross profit equals total revenue minus cost of goods sold (COGS). Gross margin is gross profit expressed as a percentage of total revenue.
Use the fields to enter your period revenue and the matching COGS in the same currency. The tool returns gross profit (currency), gross margin as a percentage, and gross margin as a decimal ratio. Review the accuracy notes before using results for reporting or pricing decisions.
Governance
Record 9a2e4ada7dde • Reviewed by Fidamen Standards Committee
Inputs
Results
Gross Profit
$40,000.00
Gross Margin (%)
4000.00%
Gross Margin (decimal)
0.4
| Output | Value | Unit |
|---|---|---|
| Gross Profit | $40,000.00 | USD |
| Gross Margin (%) | 4000.00% | — |
| Gross Margin (decimal) | 0.4 | — |
Visualization
Methodology
Gross profit is computed as total_revenue - cogs. Gross margin (%) is (gross profit / total_revenue) × 100. The calculator applies straightforward arithmetic and does not attempt to reclassify account items; inputs must reflect consistent accounting treatment.
For data integrity and traceability, follow documented accounting policies (for example GAAP or IFRS) when selecting what counts as revenue and COGS. Numerical handling follows industry guidance on numeric precision and floating-point stability as described by IEEE standards; audit trails and source ledger reconciliation are recommended per ISO quality-management practices and NIST data integrity guidelines.
Key takeaways
This calculator provides quick, auditable gross profit and gross margin calculations from two inputs. It is intended for planning, pricing checks, and simple reporting but not as a substitute for formal financial statements or audit procedures.
Always reconcile inputs against the accounting ledger and consider currency conversions and period alignment before reporting results.
Worked examples
Example 1: Total Revenue = 100000, COGS = 60000 → Gross Profit = 40000; Gross Margin = 40.00%
Example 2: Total Revenue = 25000, COGS = 20000 → Gross Profit = 5000; Gross Margin = 20.00%
Example 3: Total Revenue = 0, COGS = 0 → Gross Profit = 0; Gross Margin is undefined. Use this tool only when revenue is positive or interpret the ratio with caution.
F.A.Q.
What definitions of revenue and COGS should I use?
Use the definitions from your accounting policy or applicable reporting framework (for example GAAP or IFRS). Ensure revenue and COGS are measured over the same period and in the same currency before entering values.
How should I handle zero or negative revenue?
If total revenue is zero, margin percentage and ratio are undefined. Negative revenues or negative COGS can produce results that are mathematically correct but may require specialist interpretation; consult your accountant for unusual cases.
How accurate are the results?
The calculator performs basic arithmetic with typical floating-point precision. For regulatory reporting or audit evidence, reconcile with source systems and follow numeric precision and traceability controls recommended by IEEE and NIST. Rounding can affect displayed percent values; use ledger-level data for final reporting.
Can I use this for pricing or tax calculations?
This tool is intended for quick analysis and should not replace formal pricing models, tax advice, or audited financial statements. For tax or regulatory reporting, follow relevant laws and standards and consult a qualified professional.
Why is there a currency selector?
The currency selector controls display labelling only. The tool does not perform currency conversion. Enter values already converted to the same currency for correct results.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- Institute of Electrical and Electronics Engineers (IEEE) numerical standards — https://www.ieee.org
- Occupational Safety and Health Administration (OSHA) general guidance — https://www.osha.gov
- SEC — Non-GAAP Financial Measures Guidance — https://www.sec.gov/corpfin/non-gaap-financial-measures
- FASB — Financial Accounting Standards Board — https://www.fasb.org/
- CFA Institute — Global Investment Performance Standards (GIPS) — https://rpc.cfainstitute.org/gips-standards
Further resources
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: 9a2e4ada7ddeWhat changed (latest)
v1.0.0 • 2025-11-07 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-07 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 7, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-07 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: cc7343d75e35