Measures of proft

• Three Different Measures of Profit

  • Gross profit
  • Operating profit
  • Profit for the year (net profit)
• Profit

  The difference between total revenue and total costs
• Calculating Gross Profit


  Total Revenue - Cost of Sales
• Cost of Sales

  The costs directly related to making the product, e.g. the cost of raw materials
• Calculating Operating Profit


  Gross Profit - Other Operating Expenses
• Calculating Profit for the Year (Net Profit)


  Operating Profit - Interest