ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Gross profit is the profit a business makes after subtracting all the costs that are related to manufacturing and selling its products or services. You can calculate gross profit by deducting the cost of goods sold (COGS) from your total sales.

Detailed explanation-2: -Sales revenue minus cost of goods sold is a business’s gross profit. Cost of goods sold is considered an expense in accounting and it can be found on a financial report called an income statement.

Detailed explanation-3: -If cost of sales is rising while revenue stagnates, this might indicate that input costs are rising, or that direct costs are not being managed properly. Cost of sales and COGS are subtracted from total revenue, thus yielding gross profit.

Detailed explanation-4: -COGS are a part of the income statement where costs directly related to either the product or goods sold by a company, or the costs of acquiring inventory to sell to consumers. If the cost of goods sold exceeds the revenue generated by the company during the reporting period, means that there has been no profit.

Detailed explanation-5: -If a company’s revenue is higher than its expenses, it will report a net income.