What is Gross Profit?
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Gross Profit is a company's revenue minus its cost of goods sold. It is also known as gross margin and gross income. It is calculated by subtracting all costs related to sales i.e manufacturing expenses, raw materials, labour, selling and advertisement expenses from sales. It is an indication of the managements' efficiency to use labour and material in the production process.
Gross Profit = Net Sales - Cost of Goods Sold
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