Explain Gross Profit
Give a brief introduction of the term ‘Gross Profit’?
Expert
Gross Profit is a company’s revenue subtracts its cost of goods sold. It is also termed as gross income and gross margin. It is computed through subtracting all costs related to sales that is, manufacturing expenditures, raw materials, labor, and advertisement and selling expenditures from sales. It is a sign of the managements’ effectiveness to use labor and material in the production procedure.
Gross Profit = Net Sales – Cost of Goods Sold
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