SASA
Simple Tips by SASA
Gross Profit Formla? ∑
Gross Profit = Total Sales−Cost of Goods Sold (COGS)
How to calculate Gross Profit
Let’s say you're a self-employed artist selling custom prints:
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Total Sales: You made $2,000 in sales this month.
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Cost of Goods Sold (COGS): It costs you $700 for materials, printing, and shipping.
Using the formula: Gross Profit = $2,000 − $700 = $1,300
So, your gross profit is $1,300 for the month.
This shows how much you made from sales after covering the direct costs of creating and delivering the prints.
Gross profit example
Track your gross and net profit with SASA
Accounting software for self employed people
SASA helps you keep track of your business's income, and expenses so you can know your gross and net profit. Just connect your bank accounts ad SASA will do the rest for you.
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Gross profit is a measure of profitability that shows the revenue a business retains after covering the direct costs associated with producing or delivering goods and services. It's calculated as the difference between total sales (or revenue) and cost of goods sold (COGS). This metric is critical for self-employed individuals and businesses alike, as it helps gauge the efficiency and profitability of core operations without accounting for other business expenses.
Key Components
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Total Sales (Revenue): This includes all income generated from selling goods or services.
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Cost of Goods Sold (COGS): COGS refers to all direct expenses required to produce goods or services. For a self-employed person, this might include materials, direct labor, packaging, and shipping costs. COGS excludes indirect expenses like rent, utilities, and administrative costs, as these are not directly tied to production.
