BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Gross profit, also known as gross income, equals a company’s revenues minus its cost of goods sold (COGS). It is typically used to evaluate how efficiently a company is managing labor and supplies in production.

Detailed explanation-2: -The gross profit margin formula, Gross Profit Margin = (Revenue – Cost of Goods Sold) / Revenue x 100, shows the percentage ratio of revenue you keep for each sale after all costs are deducted. It is used to indicate how successful a company is in generating revenue, whilst keeping the expenses low.

Detailed explanation-3: -Cost of sales for goods and products If you buy in goods to sell and don’t hold any stock, also known as inventory, then this is fairly straightforward. The formula is sales income – cost of goods sold = gross profit.

Detailed explanation-4: -Cost of goods sold (COGS) is calculated by taking the value of inventory at the beginning of the period being studied, adding the cost of any new inventory purchased over the covered period, and subtracting the value of inventory held at the end of the period. COGS = Beginning Inventory + Purchases – Ending Inventory.

Detailed explanation-5: -Gross profit is the revenue left over after you deduct the costs of making a product or providing a service. You can find the gross profit by subtracting the cost of goods sold (COGS) from the revenue. For example, if a company had $10, 000 in revenue and $4, 000 in COGS, the gross profit would be $6, 000.