The difference between a company's total sales revenue and its cost of goods sold, representing the profit generated from core operations before deducting expenses.
Gross profit is the financial metric that represents the revenue earned from sales minus the direct costs associated with producing or delivering the goods or services sold, providing insights into the profitability of a small business before considering other expenses. It is calculated by subtracting the cost of goods sold (COGS) from total revenue, and it helps businesses understand the amount of profit generated solely from their core operations. Monitoring and maximizing gross profit is crucial for small business owners to ensure effective cost management and sustainable growth.