# Total gross profit formula.asp

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The gross profit percentage formula is calculated by subtracting cost of goods sold from total revenues and dividing the difference by total revenues. Usually a gross profit calculator would rephrase this equation and simply divide the total GP dollar amount we used above by the total revenues. Both equations get the result. Gross profit is the figure obtained on the profit and loss account when the cost of goods sold is deducted from the sales revenue of a business. A typical luxury car makes a gross profit of around 15-20 percent of its sales price, and small cars barely break even. A company's gross profit is the ... The calculation is gross profit (gross income) divided by total sales. This calculation results in a percentage—the higher the percentage the better. For example, if gross profit (income) is $400,000 and sales are $1,000,000, the margin is 40 percent.That means your business sold $1 million in products and its cost of sales was $600,000.