Gross profit and gross margin show the profitability of a company when comparing revenue to the costs involved in production. Both metrics are derived from a company's income statement and share similarities but show profitability in a different way.
Gross Profit
Gross profit refers to the money a company earns after subtracting the costs associated with producing and selling its products. Gross profit is represented as a whole dollar amount, showing the revenue earned after subtracting the costs of production.
Gross profit is calculated by:
Gross profit = Revenue - Cost of Goods Sold
Revenue is the total amount of money generated from sales for the period. It can also be called net sales because it can include discounts and deductions from returned merchandise. Revenue is typically called the top line because it sits on top of the income statement. Costs are subtracted from revenue to calculate net income or the bottom line.
Source : Investopedia
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