Gross profit

Updated: Aug 20, 2021

Where the buying or selling of goods is concerned, it refers to the proceeds of sale, less the cost of putting the goods into a condition for sale. Where the goods are also manufactured, this cost will include part of the overhead expenses. Otherwise, overheads concerned with distributing or selling the goods and administering the business generally are charged after gross profit (also known as ‘gross profit on trading’) to produce net profit on trading. This will then be adjusted for exceptional items or items not connected exceptional items or items not connected to produce the actual net profit.

Reference: The Penguin Business Dictionary, 3rd edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.