What is the difference between Gross Profit and Net Profit ?
Here’s the difference between Gross Profit and Net Profit:
| Aspect | Gross Profit | Net Profit |
|---|---|---|
| Definition | Revenue minus cost of goods sold (COGS). | Total revenue minus all expenses (COGS, taxes, operating costs, etc.). |
| Focus | Measures basic profitability from core activities. | Indicates overall profitability, considering all expenses. |
| Calculation | Revenue: COGS. | Gross Profit = Operating Expenses + Taxes + Interest. |
Gross profit shows direct profits, while net profit reflects the final earnings after all deductions.