Gross Profit
Categories: Accounting, Metrics
The grosser the better.
You have Sales. They came from the 14 million units of bluetooth-enabled nostril tweezers you sold this year, mostly in Russian enclaves. You recognized revenue from those sales of $100 million. In order to sell those tweezers, you had hardware costs of 4 bucks a unit in the tiny razors, the bluetooth connection device, battery pack, and plastic housing. You had a dollar a unit in assembly costs, mostly from non-union robots. And packaging costs of 30 cents a unit so in total, you had gross expenses of $74.2 million. So your gross profits this year? Yep, $25.8 million.
Gross profits come before any other profit calculation. In order to get operating profits, you'd subtract all other costs other than taxes and dividends, pretty much.
But gross, yes. A lot of nostril hair on the floor. Yum.