Gather the Data Start by collecting your total revenue and COGS for the period you want to analyse. Make sure these figures are from the same period to ensure accuracy.Step 2
Use the Formula In Excel, you can calculate gross margin using the following formula:Gross Margin (%) = ((Total Revenue - COGS) / Total Revenue) * 100
Here's a breakdown of the formula:
- Subtract COGS from Total Revenue to find the gross profit.
- Divide the gross profit by Total Revenue.
- Multiply the result by 100 to express it as a percentage.
Input the Data Enter your total revenue and COGS values into designated cells in your Excel spreadsheet.Step 4
Apply the Formula In a separate cell, use the formula mentioned above to calculate gross margin.Step 5
Format as Percentage The result will be a decimal number. Format it as a percentage to make it more readable. Select the cell with the result, right-click, choose Format Cells, and select Percentage.Step 6
Interpret the Result Your Excel sheet should now display the gross margin percentage. This figure represents the portion of your revenue that remains as profit after accounting for the cost of goods sold.