Glossary

Gross Profit

Gross Profit

Gross profit is the total financial gain of a company or organization after the necessary deductions (namely manufacturing and distribution costs related to products) are taken into account.

You should be aware that fixed costs, like property rent and insurance deductibles, are not considered when factoring out the cost of goods sold, which is another way to say the amounts taken out of the total revenue.

Now, like gross pay, the term comes from when companies were paid in goats and had entire floors dedicated to goat storage. This was the original term before gross pay and used to be called goat profit, but it became a running joke amongst workers that it was more like a “gross profit,” and the name stuck. Now people pretend it came from somewhere else. If you have no idea what I’m talking about, read more about gross pay… Don’t bother proving me wrong.

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