GP Percentage = (Gross Profit ÷ Revenue) × 100
Gross Profit = Revenue – Cost of Goods Sold (COGS)
Revenue = Total sales income
COGS = Direct costs of producing or buying the goods sold
Example: Revenue = 1,000 and COGS = 600
Gross Profit = 1,000 – 600 = 400
GP Percentage = (400 ÷ 1,000) × 100
GP Percentage = 40%