Gross profit is revenue minus the cost of the goods you sold in the same period. It is the money left to pay for marketing, staff, rent and everything else.
Gross profit = Revenue − Cost of goods sold
On the sample data below, six months come to ₹12,88,800.
Why it matters
Gross profit is the amount you can actually spend. Growing revenue at a lower margin can leave gross profit flat, which is why it is worth tracking in rupees, not only as a percentage.
Worked example
The table shows the columns this metric needs from six months of a made-up subscription brand. Add each column up over the six months, then put the totals into the formula:
| Month | Revenue (net of discounts) | Cost of goods sold |
|---|---|---|
| 2026-01 | ₹4,12,000 | ₹2,26,600 |
| 2026-02 | ₹4,38,500 | ₹2,36,800 |
| 2026-03 | ₹4,71,200 | ₹2,59,200 |
| 2026-04 | ₹4,55,800 | ₹2,55,200 |
| 2026-05 | ₹5,02,300 | ₹2,71,200 |
| 2026-06 | ₹5,48,900 | ₹2,90,900 |
| Total | ₹28,28,700 | ₹15,39,900 |
₹28,28,700 − ₹15,39,900 = ₹12,88,800
Add up first, then divide. Averaging the six monthly figures gives a slightly different answer, because it counts a small month the same as a large one.
Month by month
| Month | Gross profit |
|---|---|
| 2026-01 | ₹1,85,400 |
| 2026-02 | ₹2,01,700 |
| 2026-03 | ₹2,12,000 |
| 2026-04 | ₹2,00,600 |
| 2026-05 | ₹2,31,100 |
| 2026-06 | ₹2,58,000 |
Gross profit calculator
How to read it
Compare gross profit with your fixed costs. If gross profit does not cover them, more revenue at the same margin is the only way out, and that usually needs more marketing.
Common mistakes
- COGS must match the period of the revenue: the cost of the goods that were sold, not of the goods you bought this month.
- Returns reduce revenue; the returned stock, if resellable, reduces COGS too. Handle both or neither.
- Payment gateway fees and shipping are often left out of COGS. That is fine, but then contribution margin is the better guide to unit economics.
Calculate gross profit in Excel, SQL or Python
The quickest version, for the sample sheet laid out as in the CSV (headers in row 1, months in rows 2 to 7):
=SUM(B2:B7) - SUM(C2:C7)- Gross profit in Excel and Google Sheets — per-month formula and zero-safe version
- Gross profit in SQL — query by month and for the period
- Gross profit in Python (pandas) — pandas script with expected output
Related metrics
See all business metrics, or the statistics methods that sit behind them.
Questions people ask
- What is gross profit?
- Gross profit is revenue minus the cost of the goods you sold in the same period. It is the money left to pay for marketing, staff, rent and everything else.
- How do you calculate gross profit?
- Gross profit = Revenue − Cost of goods sold. For example, with six months of sample data: ₹28,28,700 − ₹15,39,900 = ₹12,88,800.
- What is the gross profit formula in Excel?
- With the sample data laid out as in the downloadable CSV, =SUM(B2:B7) - SUM(C2:C7) gives the figure for the whole period. For one month, use =B2 - C2 and fill it down.
- What is a good gross profit?
- There is no figure that is right for every business: it depends on your products, prices and channels. Compare gross profit with your fixed costs. If gross profit does not cover them, more revenue at the same margin is the only way out, and that usually needs more marketing.
Check how stable it is
A metric moves for ordinary reasons as well as real ones. These methods separate the two: the spread shows what a normal month looks like, the moving average smooths it, the z-score flags a month that is out of line and the trend line shows the direction.
Guides
About the data on this page
The figures come from a small made-up dataset, printed above in full so you can check every number by hand. Download it as monthly.csv. The results are computed from those rows when the page is built, and the Excel formulas, SQL and Python on these pages are run against the same rows before publishing, so the code and the answers agree.
To get these numbers from your own data without writing formulas, try AnalyzeIt: ask in plain words and it shows the working behind every figure.
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