What Is Gross Profit? What Does Gross Profit Tell Us?
Gross profit is money earned on revenue after the cost of goods sold. Taken as a percentage of revenue, gross profit makes up the gross profit margin.
For example, if you sold 10 widgets for $10 each, but each widget cost you $6 to make, you had $100 in revenue ($10 x 10 widgets = $100), $60 in COGS ($6 x 10 widgets = $60), and $40 in gross profit ($100 - $60 = $40).
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Published: 6/03/2021
