Gross profit, also called gross income, is calculated by subtracting the cost of goods sold from the revenue.
As a rule, gross profit includes only variable costs and does not take into account fixed costs.
Gross profit evaluates how efficiently a company uses its labor and materials to produce goods or services.
Gross profit, which reflects only the cost of goods sold, differs from net profit, which takes into account all expenses of the company.
Derived from gross profit is gross profit, a margin showing what percentage of a company’s income can be used to cover the company’s operating expenses.
Accrual accounting is a method of accounting in which revenue or expenses are recorded at the time of the transaction, and not at the time the payment is received or made.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.
Adjusting journal entries are used to record transactions that have occurred but have not yet been properly accounted for in accordance with the accrual basis.
The annual report is a corporate document distributed to shareholders, which sets out the financial position and activities of the company for the previous year.
An asset is a resource with economic value that is owned or managed by an individual, corporation or country with the expectation that it will provide benefits in the future.