Gross Profit

What is Gross Profit?

Gross Profit is the amount left over from total revenues after Cost of Goods Sold (COGS) has been deducted. COGS will typically include the cost of making and selling the product or the cost of services provided by the company.

Alternate names: Gross Margin, Gross Income

How to calculate Gross Profit

ƒ (Revenue) - (COGS)

Favourable trend

Up is positive

Level of complexity

Beginner

Date created: Feb 21, 2019

Latest update: May 15, 2019

Tell me more about this metric

Gross Profit indicates how well a company uses its labour and supplies to produce goods and services. This measure only considers variable costs, such as direct labor or commission, as opposed to fixed costs, such as rent or insurance.

Gross Profit is always expressed as a monetary value. It’s equally important to look at Gross Profit as a percentage of Revenue (Gross Margin or Gross Margin Percentage).