The bottom line near the top of the page
You will be pleased to know, I hope, that we are now moving on to look at how you arrive at gross profit. The arithmetic is no more complex than sales revenue less the cost of sales. However, if you thought that we had finished with our discussion of costs, think again. In this chapter, we will look more closely at the costs related to product or production costs and inventory. We will also look at pricing policies.
| Tetrylus Inc. | |
|---|---|
| Gross profit, year 5 | |
| Sales of hardware only | |
| US dollars | |
| Sales | 21 870 000 |
| Less Cost of sales | 5 832 000 |
| Gross profit | 16 038 000 |
| Less Other expenses | 4 038 000 |
| Net profit | 12 000 000 |
By the way, you will occasionally hear Americans refer to gross profit as gross margin. I think the idea is to avoid ...
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