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Gross profit This problem has been solved See the answer Gross revenue minus cost of goods sold (COGS) is often referred to as A.

This is the amount of profit a company makes after deducting all the costs of the production process. Question: Gross revenue minus cost of goods sold (COGS) is often referred to as A. Gross Profit is the revenues/sales minus COGS. It includes discounts and deductions for returned merchandise. You can also look at year-to-year trends, examining whether your gross profit is headed up or headed down. Revenue is the amount received from selling the products or services over a specific period. (That’s one reason why Walmart can charge such low prices.) To gauge your company’s gross profit, you can compare it with industry standards, particularly for companies of a similar size in your industry. A company with larger revenues can thrive with a lower gross profit percentage than a smaller one. Sales revenue minus cost of goods sold is a business’s gross profit. How much gross profit is enough? That varies substantially by industry, and it’s likely to vary from one company to another even in the same industry. Cost of Goods Sold (COGS) is the cost of a product to a distributor, manufacturer or retailer. Your COGS is calculated by adding the cost of your labor, materials, supplies. (Excerpts from Financial Intelligence, Chapter 9 – The Many Forms of Profit) Gross margin - also called gross profit margin or gross margin ratio - is a companys sales minus its cost of goods sold (COGS), expressed as a percentage. Once you have your gross revenue, you need to figure out your cost of goods sold. If our sample company has revenue of $8,000 and COGS of $7,000, the calculation is as follows: The gross margin is the percent of the selling price that will cover your fixed costs and profits - (net sales less variable costs). Even when gross profit is not shown it is easy to calculate. These income statements don’t show a gross profit line at all. Though most income statements follow the format of revenue minus COGS equals gross profit, a small but significant number of income statements put COGS or COS under a subhead called operating expenses. EBITDA (earnings before interest, taxes, depreciation, and amortization) is revenue minus the COGS mentioned above as well as operating expenses and selling, general, and administrative expenses. The operating profit margin is calculated similarly: Operating. Sign up for our online financial statement training and get the income statement training you need. Here, the gross profit is simply the revenue minus COGS only. Gross profit must be sufficient to cover a business’s operating expenses, financing costs, and taxes with enough left over for some net profit. It is what is left over after a company has paid the direct costs incurred in making the product or delivering service. To calculate your net profit, you must first know what your gross profit is. Gross profit is sales minus cost of goods sold or cost of services.