Gross Profit

Gross profit is the difference between total revenue and cost of revenue. It is the profit a company makes after deducting the cost directly associated with making the good or providing the service.

In the example above, the gross profit would be Rs.12,50,000 (20,00,000 – 7,50,000).

Companies that are able to increase or at least maintain their gross profit in relation to sales are desirable.