DukaSmart editorial team ·
Calculate sales revenue
Add the selling price of each item sold during the period. For example, selling 10 items at TZS 8,000 each gives TZS 80,000 in revenue before considering cost or expenses.
Subtract the cost of the items sold
If each of those 10 items cost TZS 5,000 to buy, the cost of goods sold is TZS 50,000. Gross profit is TZS 80,000 minus TZS 50,000, or TZS 30,000.
Account for operating expenses
Rent, wages, transport, utilities, taxes, fees, and other costs reduce the amount left after gross profit. Net profit requires including the relevant expenses for the same period.
Keep costs tied to the right sale
When purchase prices change, avoid applying today's cost to every historical sale. Keep a dated record of costs or use a system that freezes item cost when a sale is made. DukaSmart's estimated profit uses the cost and selling price stored on sale items.
Try the simple calculator
Use the profit calculator to estimate gross profit and gross margin from total sales and cost of goods sold. It is an educational estimate, not an accounting or tax statement.
Questions readers ask
What is the difference between gross and net profit?
Gross profit subtracts product cost from sales revenue. Net profit also accounts for operating expenses and other relevant costs.
Does the DukaSmart report show net profit?
No. It shows estimated product gross profit before operating expenses, taxes, and other costs.