Profitability

Mon, 01 Jan 0001 00:00:00 +0000

Profitability

Gross Profit

There are three major types of profits -

gross profit
operating profit
net profit

Each of them are significant in their own way.

Gross Profit is the amount of money a company earns after deducting the costs directly associated with producing their goods/products/services from the revenue. These costs are collectively known as Cost of Goods Sold or COGS.

How do we define COGS though and what do directly associated costs mean? Interestingly, the answer can vary depending upon the company we’re looking at. Let’s look at some examples.

Financial Metrics and Ratios on r/IndiaInvestments Wiki

Profitability

Profitability

Gross Profit