Gross profit

Gross profit

In accounting, Gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Note that this is different than operating profit.

Net sales are calculated:

:Net sales = Sales – Sales returns and allowances

Gross profit is found by deducting the cost of goods sold:

:Gross profit = Net sales – Cost of goods sold

Gross profit should not be confused with net income:

:Net income = Gross profit – Total operating expenses

Cost of goods sold is calculated differently for merchandising business than for a manufacturer.

ee also

*Profit, for a more general discussion, including operating profit
*EBITDA
*Profit margin, the ratio of net income to net sales
*Income statement, overview of related concepts


Wikimedia Foundation. 2010.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • gross profit — gross margin; = gross profit margin The difference between the sales revenue of a business and the cost of sales. It does not include the costs of finance, administration, or distribution. Compare: net profit …   Accounting dictionary

  • gross profit — gross margin; gross profit margin The difference between the sales revenue of a business and the cost of sales It does not include the costs of finance, administration, or distribution. Compare net profit …   Big dictionary of business and management

  • gross profit — n ↑gross margin …   Dictionary of contemporary English

  • gross profit — index proceeds Burton s Legal Thesaurus. William C. Burton. 2006 …   Law dictionary

  • gross profit — noun count BUSINESS the difference between the price that someone sells goods for and what it costs to produce them …   Usage of the words and phrases in modern English

  • gross profit — noun (finance) the net sales minus the cost of goods and services sold • Syn: ↑gross profit margin, ↑margin • Topics: ↑corporate finance • Hypernyms: ↑net income, ↑ …   Useful english dictionary

  • Gross Profit — A company s revenue minus its cost of goods sold. Gross profit is a company s residual profit after selling a product or service and deducting the cost associated with its production and sale. To calculate gross profit: examine the income… …   Investment dictionary

  • gross profit — the excess of net sales over cost of goods sold usually expressed as a percentage. Glossary of Business Terms A subtotal on a firm s statement of income that is net sales minus cost of goods sold. Sometimes called gross profit on sales. American… …   Financial and business terms

  • gross profit — UK / US noun [countable] Word forms gross profit : singular gross profit plural gross profits business the difference between the price that someone sells goods for and what it costs to produce them …   English dictionary

  • gross profit margin — gross profit …   Accounting dictionary

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”