Gross Revenue Minus Expenses

Your cost of goods sold cogs is how much money you spend directly making your products.

Gross revenue minus expenses. Gross profit is your business s revenue minus the cost of goods sold. This could have happened if. Derived from gross profit operating profit reflects the. Gross profit is the total revenue minus the expenses directly related to the production of goods for sale called the cost of goods sold.

Net income is the amount remaining after taxes and operational expenses. The formula for net income is simply total revenue minus total expenses. Net sales gross sales customer discounts returns allowances gross profit net sales cost of goods sold operating profit gross profit total operating expenses net profit operating profit taxes interest net profi. It tells you how much money a company would have made if it didn t pay any other expenses such as salary income taxes copy paper electricity water rent and so forth for its employees.

People often refer to net income as the bottom line as it is the last line item on an income statement. Operating profit is gross profit minus all other fixed and variable expenses associated with operating the business such as rent utilities and payroll. Gross profit is your company s profit before subtracting expenses. Or some might say sales minus the cost of goods sold.

But your business s other expenses are not included in your cogs. A company s gross income is its revenue minus the cost of goods sold. Net income goes even further than net gross margin because you deduct all other expenses including overhead and taxes. The gross profit of a business is simply revenue from sales minus the costs to achieve those sales.

Business gross income can be used to calculate profit margin.