Week 6

• Gross Profit


  - A key financial metric that measures a company's profitability after deducting the cost of goods sold from its total revenue

  - represents the money a business makes from selling goods or services before accounting for operating expenses, taxes, and other costs
• Formula for gross profit

  Total Revenue - COGS

  • TOTAL REVENUE is the total income from selling goods or services
  • COGS includes the direct costs of producing the goods or services
• Importance of gross profit

  • Evaluates business efficiency
  • Affects pricing strategy
  • Influences financial planning
• Ways to improve gross profit

  • Increase selling price
  • Reduce production costs
  • Improve sales volume