It does not include the costs of running your business, such as taxes, interest and depreciation.
It shows you clearly how much money you’re bringing in from your total sales. It is the total amount of income your company generates from the sale of your products or services.
Here's a look at how to calculate gross profit. "Having a deep understanding of your profit margins allows you to be adaptable and pivot at speed, while providing proactive leadership and fact-based decision making." "Understanding your profit margins is particularly essential in navigating volatile times," says Claude Compton, founder of Pave Projects, a London-based hospitality group. If you own a business, monitoring your profit margins regularly will give you the valuable data you need to identify the most lucrative areas of your business and scale them.