Rytvae Consulting · Think Right · Invest Right
Gross Profit Calculator
Result
Chart
Show formula & working
COGS = Opening stock + Purchases + Direct expenses − Closing stock
Gross profit = Revenue from operations − COGS
Details
How this works
Gross profit shows what the business earns on its goods before overheads, finance costs and depreciation.
Changes in stock matter: stock built up during the year is not a cost of this year's sales, so closing stock comes off.
Frequently asked questions
Is gross profit shown in Schedule III?
Not as a line. It is worked out from cost of materials, purchases, changes in inventories and direct costs, which Schedule III shows separately.
Why does gross margin fall when stock is written down?
A lower closing stock value raises cost of goods sold for the year.
Getting accounts ready for a lender?
How figures are classified changes the ratios lenders read. Talk to Rytvae before you submit.