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Empire AI Finance
Gross Profit Calculator
Calculate gross profit, gross margin and markup in seconds — then see how operating costs and volume affect the bottom line.
Your Numbers
Total money coming in from sales before any deductions.
Direct costs: materials, labour, delivery, payment fees.
Rent, salaries, marketing and other overheads.
Total units or clients in the period.
A gross profit goal to reverse-engineer required revenue.
Gross Profit
£0.00
Enter revenue and COGS to see your gross profit.
Breakdown
- Revenue
- £0.00
- Cost of Goods Sold
- £0.00
- Gross margin
- —
- Markup on COGS
- —
Keep Going
Plan the revenue you need and the costs to control.
What Gross Profit Means
Gross profit is the money left after you subtract the direct cost of making or delivering your product or service from your total revenue. It is the first measure of whether your core business model is working — before rent, software, marketing or salaries are taken into account.
It is not the final profit. Operating expenses, tax, interest and financing still sit below the line. But gross profit tells you if each sale is contributing enough to cover the rest of the business.
Gross Profit Formula
The calculation starts with two numbers: revenue and the direct cost of goods sold. Everything else flows from there.
Gross profit
Revenue − COGS
The cash left from sales after direct costs are paid.
Gross margin
(Gross profit ÷ Revenue) × 100
The percentage of revenue that becomes gross profit.
Markup on COGS
(Gross profit ÷ COGS) × 100
The uplift you charge above direct costs.
Gross profit per unit
Gross profit ÷ Units sold
The contribution each unit makes before overheads.
Worked Example
A product business generates £100,000 in revenue during a quarter. The direct costs of materials, manufacturing, shipping and payment fees total £60,000.
Revenue
£100,000
COGS
£60,000
Gross profit
£40,000
£100,000 − £60,000
Gross margin
40%
£40,000 ÷ £100,000 × 100
Markup on COGS
66.67%
£40,000 ÷ £60,000 × 100
With 500 units sold
£80 / unit
£40,000 ÷ 500 units
Operating expenses of £25,000
Net profit: £15,000 / 15% net margin
Target gross profit of £50,000
Required revenue at 40% margin: £125,000
Use Cases
Gross profit analysis applies to every business that sells something — physical products, digital services, retainers or one-off projects.
Pricing & Discounting
See how a price cut or promotional discount changes your gross margin and the volume needed to protect profit.
Product Mix Decisions
Compare the gross margin of different products or services to decide where to focus marketing and production.
Service Costing
Turn project revenue and delivery costs into a clear gross profit and per-client contribution.
Reporting & Forecasting
Build gross profit into budgets, forecasts and investor updates with a consistent formula and unit economics.
Mini-FAQ
Quick answers to the most common gross profit questions.
What is gross profit?
Gross profit is revenue minus the direct cost of goods sold (COGS). It measures how much money the core business generates before operating expenses.
How is gross profit different from net profit?
Gross profit only subtracts direct costs from revenue. Net profit also subtracts operating expenses, tax, interest and other overheads.
What counts as COGS?
COGS includes direct materials, direct labour, manufacturing costs, shipping to the customer and payment fees. It excludes rent, marketing and general overheads.
What is a healthy gross margin?
Healthy margins vary by industry. Digital services often run above 70%; retail and physical goods may run 20–50%. Consistency and improvement matter more than a single figure.
How do you improve gross profit?
Raise prices, reduce direct costs, negotiate supplier terms, shift product mix toward higher-margin offers, or cut waste and returns.
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Empire AI Finance is a software platform, not an investment or trading service. We do not provide financial advice, manage funds, promise returns, or ask users to deposit money outside our official subscription flow.
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Empire AI Finance is software, not a regulated adviser. Outputs are informational and should be reviewed by a qualified professional before any decision is made.
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