What is gross profit?

Gross profit (definition)

Gross profit is the amount of money your business makes from sales after deducting the cost of making and selling your product. This amount is before you pay operating costs, payroll, tax and overhead.

Gross profit reflects how profitable a product is. The less it costs to make, and the higher you can sell it for, the larger your gross profit will be. Gross profit is also known as gross income, and appears on the income statement.


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