Gross Margin Percentage Calculator

Gross margin percentage measures the relationship between net sales and cost of goods sold.

Definition Gross margin percentage equals gross profit divided by net sales.
Gross profit is sales minus cost of goods sold..
Net sales is total sales less any returns.
Gross Margin Percentage Calculator
Sales, net of returns $
Cost of goods sold $
Gross margin percentage

Working with your gross margin percentage

Your gross margin is a measure of sales profitability and represents what portion of sales revenue is available to cover the other costs of running your business and provide net profits. You can compare your gross margin percentage with industry data to measure how your company compares to competitors. Margins lower than competitors may be the result of lower volume or higher costs.

By monitoring changes in your gross margin percentage over time, you can better understand the financial dynamics of your business and run it more effectively. Here is a worksheet you can use to track changes in this and other important measures.