What is gross profit?

Gross profit is the amount of revenue remaining after subtracting the cost of goods sold (COGS). It shows how much money a business earns from its products or services before accounting for operating expenses and other costs.

Example: A company generates $50,000 in revenue and incurs $20,000 in cost of goods sold, resulting in a gross profit of $30,000.

Related terms: Gross Margin, Revenue, Cost of Goods Sold (COGS), Income Statement