Gross Profit Formula

After every sales day, you are required to check the total sales and the profit for the day. When it is an organization, you need to check the sales and profits for a selling period. Profits are categorized into two types, Gross Profit (GP) and Net profit. Here is a useful gross profit formula for salespersons, company managers, and accountants to calculate the gross profit of their company. As per this GP Formula, just reduce the revenue from the cost of goods sold to get the GP.

GP Formula


Gross Profit = Revenue - Cost of Goods Sold

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In simple gross profit can be said as just the revenue of the total sales minus the cost of goods sold. Use the above gross profit formula to assess the sales and profit ratio of your organization.

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