Gross profit (gross profit): The difference between sales and production costs

Gross profit is the difference between a company's sales revenue and its direct production costs. These costs usually include material costs, production wages and other direct expenses necessary to produce the goods or services. Gross profit is a key indicator of a company's profitability and helps to assess the efficiency of production and sales processes. It is often expressed as a percentage of sales, known as gross margin, and is an important part of financial analysis and planning.