The Gross Margin Calculator is a simple tool that helps businesses and individuals determine the gross margin of a product or service. Gross margin is a key financial metric that shows the percentage of revenue remaining after accounting for the cost of goods sold (COGS).
Formula
The gross margin is calculated using the following formula:
How to Use
Enter Revenue: Input the total sales revenue from the product or service.
Enter COGS: Input the total cost associated with producing the goods or services.
Calculate: The tool will compute the gross margin percentage.
Interpret Results: A higher gross margin indicates better profitability, while a lower margin may suggest inefficiencies or pricing issues.
Example
Let’s say a company sells a product for $200, and the COGS is $120.
Revenue = $200
COGS = $120
Gross Margin Calculation:
Result: The gross margin is 40%, meaning 40% of the revenue remains after covering production costs.
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