What is gross profit?

Gross profit (definition)

Gross profit is the money you have left after paying for the things you sold to customers.

You don’t get to keep gross profit. You still need to pay other operating expenses such as rent, electricity, office supplies and loan repayments out of this pot of money. You will also need to pay taxes on what's left after that.

Gross profit formula shows that revenue minus the cost of goods or services sold equals gross profit.

Gross profit is what’s left after paying for the things you’ve sold to customers

Gross profit tells you how much money you made on sales. The higher it is, the more money you have to cover operating expenses and the more chance you have of generating net profit. Gross profit appears on your income statement.

See other terms

Net profit

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