Profit - SS2 Commerce Past Questions and Answers - page 1
Profit is the financial gain or benefit that is earned after deducting:
Taxes from revenue
Expenses from revenue
Interest from revenue
Gross profit represents the profit made from business operations before deducting:
Cost of goods sold (COGS)
Interest
Taxes
Net profit is the final profit earned after deducting all business expenses, including:
Cost of goods sold (COGS) and taxes
Operating expenses, taxes, and interest
Salaries and rent
Gross profit focuses on the profit generated from:
Selling goods or providing services
Paying taxes and interest
Renting office space
Net profit provides a comprehensive view of a business's financial performance by considering:
Revenue only
All expenses
Gross profit only
Define the term "gross profit" in relation to a business's financial performance.
Gross profit is the profit made from business operations before deducting the cost of goods sold (COGS), providing insight into the profitability of the core operations.
What is the key difference between gross profit and net profit?
The key difference is that gross profit represents profit before deducting all expenses, focusing on the cost of goods sold, while net profit is the final profit earned after deducting all expenses, including operating expenses, taxes, and interest.