What is gross profit

What is “gross profit” ?

Gross profit is sales minus cost of goods or cost of services

It is what is left over after a company has paid the direct costs incurred in making

the product or delivering the service

A business has to make enough gross profit to covers its overheads such as light and heat, phone, loan interest etc.

Gross profit varies from industry to industry. For example, in a grocery business, gross profit is a small percentage of sales however for a jewelry business, its a much large percentage.

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