For example, if your revenue is $100,000, and your COGS is $50,000, your gross profit margin would be (100,000 - 50,000)/100,000. This equation returns a gross profit margin of 50%.

It pains me to state that in today’s small-business community, about 80% of small businesses in the U.S. fail after one year, according to Bureau of Labor Statistics data (via Investopedia).