What is Gross Profit in Retail? Explained

Gross profit is the amount remaining after subtracting the cost of goods sold (COGS) from total revenue. This fundamental financial metric indicates the profitability of a business's core operations. Calculated before factoring in operating expenses, taxes, and other costs, gross profit offers insights into a retailer's efficiency in managing production or procurement expenses. Monitoring gross profit is crucial, providing a snapshot of a business's financial health and guiding strategic decisions to optimize overall profitability.