Gross Profit

Gross profit means revenue minus the direct costs of producing or delivering goods and services. In simple terms, gross profit shows how much money is left after paying the basic cost of what was sold. Gross profit is important because it shows whether a company can sell products or services for more than they cost to produce or deliver. It is a key measure of basic business profitability. For example, if a company has $1 million in revenue and $600,000 in cost of goods sold, its gross profit is $400,000. Gross profit is not the same as net profit. Gross profit does not include many operating expenses, taxes, interest, or other costs.