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How to calculate gross margin in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=(B2-A2)/B2✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Cost | Price |
| 60 | 100 |
=(B2-A2)/B2→0.4
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Step by step
- 1Subtract cost from price to get profit: B2-A2.
- 2Divide by the price (B2) — margin is relative to revenue, not cost.
- 3Format as a percentage to read it (e.g. 0.4 = 40%).
Tips
- Markup divides by cost; margin divides by price — don't mix them up.
- Use IFERROR to handle rows where price is blank or zero.
Need it for your exact data?
Describe your columns in plain English and get the precise formula for your sheet, with the right Excel or Sheets syntax.
Frequently asked
What's the difference between margin and markup?
Margin is profit ÷ price; markup is profit ÷ cost. The same dollar profit gives a smaller margin than markup.
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