What is gross profit

Gross profit is a measure of how a company is doing and is often used to assess the performance of a company.

How to calculate gross profit

To find the gross profit, you subtract the cost of goods sold from the sales revenue. To calculate the gross profit as a percentage, multiply that number by 100 and divide by the sales revenue.

The tax authorities often use the gross profit for an industry or similar to assess whether there may be signs of undeclared sales in a company.