MANAGEMENT

Detailed explanation-1: -Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of providing its services.

Detailed explanation-2: -Gross profit is the total amount of money that’s left over after you subtract all of those expenses from your net sales.

Detailed explanation-3: -Though both are indicators of a company’s financial ability to generate sales and profit, these two measurements have entirely different purposes. Gross profit is calculated by subtracting cost of goods sold from net revenue. Then, by subtracting remaining operating expenses of the company, you arrive at net income.

Detailed explanation-4: -Net sales is what remains after all returns, allowances and sales discounts have been subtracted from gross sales. Net sales is usually the total amount of revenue reported by a company on its income statement, which means that all forms of sales and related deductions are combined into one line item.

Detailed explanation-5: -A company’s gross profit margin percentage is calculated by first subtracting the cost of goods sold (COGS) from the net sales (gross revenues minus returns, allowances, and discounts). This figure is then divided by net sales, to calculate the gross profit margin in percentage terms.