Okuzeka
Accounting & Tax vocabulary · Financial Statements

Gross profit

Meaning in accounting & tax, with examples

nounCore term

In accounting & tax, gross profit means: Revenue minus the cost of goods sold, before operating expenses such as rent, salaries and marketing are deducted.

In Turkish: brüt kar, brüt satış karı

How it is used

Gross profit divided by revenue gives the gross margin, a key measure of pricing and production efficiency. Managers talk about protecting or improving gross margin.

Example sentences

  1. Gross profit was flat, but higher marketing costs pushed operating profit down.

  2. Our gross profit margin on spare parts is much higher than on machines.

Common collocations

  • gross profit margin
  • gross margin
  • improve gross profit
  • operating profit
  • cost of goods soldThe direct cost of the products a company sold in a period, such as purchase price, materials and production labour. It is deducted from revenue to find gross profit.
  • revenueThe income a business earns from its normal activities, mainly from selling goods or services, before any costs or expenses are deducted.
  • net incomeThe profit left after all expenses, interest and taxes have been deducted from revenue for a period. If the result is negative, it is a net loss.
  • income statementA financial statement that shows a company's revenue, expenses and resulting profit or loss over a period, such as a quarter or a year.
  • EBITDAEarnings before interest, taxes, depreciation and amortization: a measure of operating profit that leaves out financing costs, tax and non-cash asset costs.

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.