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How to calculate gross margin in Excel and Google Sheets
Topic:Finance basicsExcel & Google Sheets
=B2-C2/B2✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Revenue | Cost of Goods Sold | Gross Margin |
| 1000 | 400 |
=B2-C2/B2→400
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Step by step
- 1Enter your sales revenue in cell B2.
- 2Enter your cost of goods sold in cell C2.
- 3In cell D2, enter the formula =B2-C2/B2 to calculate the gross margin.
Tips
- Ensure that your revenue and cost values are positive numbers to avoid errors.
- Format the result as a percentage for better readability.
- Check for any typos in your formula to prevent calculation errors.
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Frequently asked
What is gross margin?
Gross margin is the percentage of revenue that exceeds the cost of goods sold.
Can I use this formula for services?
Yes, replace 'cost of goods sold' with the direct costs associated with providing the service.
Why am I getting an error?
Ensure that your revenue is not zero and that both revenue and cost inputs are numerical values.
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