gross profit

Gross profit is the amount of money a business makes from selling its products or services after subtracting the direct costs involved in producing them, known as cost of goods sold (COGS). It shows how efficiently a company is producing and selling its offerings before considering other expenses like salaries, rent, or marketing. For example, if a company sells a product for $100 and the direct costs to make it are $60, the gross profit is $40. Gross profit helps assess the core profitability of the company's primary activities.