Gross profit margin (calculation)
Gross profit margin is gross profit divided by revenue, times 100.
How to calculate gross profit margin
Example of a gross profit margin calculation
Let’s say your business makes $20,000 by cleaning offices. It costs you $8000 to provide those services. Your gross profit is $12,000. Your gross profit margin is 60%.
Want to try this calculation for your own business? Check out our gross margin calculator.
See related terms
Handy resources
Advisor directory
You can search for experts in our advisor directory
Income statement template
Download an income statement template to help track your profitability
Financial reporting
Keep track of your performance with accounting reports
Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.
