Gross Profit - Ordered
| Name | Gross Profit - Ordered |
| Description | Gross Profit ordered results when subtracting the Cost of Goods Sold - Ordered from Net Incoming Orders. The Gross Profit ordered is used to determine the Gross Profit Margin ordered. The ordered values are useful to calculate Income Statement forecasts |
| Interpretation | Gross profit is a basic measure of the profitability of the business and it shows the return which a business can make from making and selling its products. Larger gross profit is generally good for companies and reflects greater efficiency in turning stock into income and more money available for reinvestment into the company for research and development, marketing and other investments. Increased investment into R and D, for example, could eventually lead to a reduction in Cost of Goods Sold - earned over the long run. Growth of gross profit reflects the positive business development. Gross profit decrease is largely the result of the sales decrease or increase in manufacturing costs. Gross profit itself does not provide a lot of information about the underlying forces of the business. The logical step after calculating gross profit is to go on to calculate the gross profit margin, which is the gross profit as a percentage of net revenue. |
| Calculation Formula | Absolute Total Value |
| Unit of Measure | Currency |
| Direction of Improvement | maximize |
| Industry Relevance | |
| Country Relevance |