Gross profit is what's left after subtracting the direct cost of what you sold from your revenue. It shows how profitable your core product or service is.
Published July 2026 · Updated July 2026
Gross profit is revenue minus the direct cost of the goods or services sold (cost of sales). It shows how much your core activity makes before general running costs are taken into account.
Gross profit is the pound figure; gross margin expresses it as a percentage of revenue. Margin is more useful for comparing over time or between products, because it strips out the effect of size.
No. Gross profit is before overheads; net profit is after all other costs. Net profit is the true bottom line.
Raise prices, cut direct costs, or shift towards higher-margin products. Our calculators show the effect instantly.
Source: Investopedia ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.