Gross Profit

Gross Profit represents the revenue remaining after subtracting the direct costs associated with producing goods or delivering services (COGS). It excludes operating expenses, taxes, interest, and other non-operating costs.

Gross Profit Formula: Gross Profit = Revenue – COGS

Gross profit serves as an important performance indicator for pricing strategies, production efficiency, and supply chain management. Sustained gross profit growth often correlates with scalable business models, while sharp declines may signal cost management issues or market saturation.