Gross profit the foundational level of profitability, and is a simple equation to calculate. Gross profit relies on finding the total dollar figure of sales that were made during a particular time period and subtracting the cost of the goods that were sold (or COGS) during that time period.  Other factors affect gross profit before it becomes money that the business can pay out or invest in itself.

How to calculate gross profit: Gross Profit = Sales - Cost of Goods Sold

Other types of profit that may be derived from gross profit: Operating Profit, Net Profit, Gross Profit Margin

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