Gross profit, also known as gross income, is the revenue a business earns from selling its products or services before subtracting the cost of goods sold (COGS).
It reflects how much money the company makes from its core operations, not including expenses like rent, salaries, or taxes. If this figure is negative, it’s referred to as a gross loss. Gross profit differs from net profit, which accounts for all operating and non-operating expenses.
A related term is gross margin, which is gross profit expressed as a percentage of net sales, the total sales revenue after deducting returns, discounts, and allowances.