Definition The profit left after taking the direct costs of producing goods away from revenue.
Example Revenue of €500k minus €300k of COGS gives a gross profit of €200k.
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Why it matters It shows whether a business makes money on what it sells before overheads.
Where it is used Profit and loss statements and product profitability reports.
How to calculate it Revenue − COGS
Worked example Revenue of €500k minus €300k of COGS gives a gross profit of €200k.
