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💰 Gross Profit

Section: Income Statement

The Income Statement (also called the Profit & Loss Statement or P&L) shows how your business performed over the year — what you earned and what you spent. These fields follow the standard GAAP income statement structure from top to bottom.

💰 Gross Profit

What it is: Your Revenue minus the direct costs of delivering your product or service (called Cost of Goods Sold or Cost of Revenue). It represents how much money is left over after paying for what it directly cost to make or deliver what you sold.

Gross Profit = Revenue − Cost of Goods Sold (COGS)

What counts as Cost of Goods Sold (COGS)?

  • Product business: Raw materials, manufacturing labor, packaging, shipping costs
  • Software/SaaS: Hosting costs, third-party licenses, customer success directly tied to delivery
  • Service business: Direct labor costs for delivering the service (contractor fees, direct employee wages)
  • Retail: Wholesale cost of the inventory you sold

Where to find it: On your P&L report, look for the line "Gross Profit" or "Gross Margin." It appears after Revenue and after the COGS section.

Example: You sold $1M in software subscriptions. Your hosting, support, and direct delivery costs were $350K. Gross Profit = $650,000 (65% gross margin).