What is gross profit

[@TheFinanceStoryteller]

Enjoyed this video? Then please subscribe to the channel, and watch the video on Cost Of Goods Sold next: kzbin.info/www/bejne/oHa4n3ablJ58Y9U

[@neelmoradiya1389]

Gross profit = revenue - cost of goods sold

[@TheFinanceStoryteller]

Correct! Or if you are selling services, then it is revenue minus cost of services sold.

[@neelmoradiya1389]

@@TheFinanceStoryteller i was just taking notes

[@princejag]

Man, you always surprises me with the unexpected.

[@TheFinanceStoryteller]

Haha, happy to hear that! :-)

[@rahabshimaluwani6910]

Wow....your explanation has really helped me alot... Thank you sir.

[@TheFinanceStoryteller]

You are most welcome, Rahab! Thank you for watching and commenting.

[@claraho5708]

I love your videos, they are so clear, well explained and well designed. I can guarantee you that if I had to learn these concepts just from books - it wouldn't sink in! Thank you!!!!

[@TheFinanceStoryteller]

Wonderful to hear that, Clara!!!! Please subscribe, and share the channel with friends and colleagues. Let me know if there are any topics that you think I should add a video on.

[@konstancyja82]

Wow 🤩 i like the small facts you share

[@TheFinanceStoryteller]

You're welcome! It's as much about how to define and calculate things, as it as about what the outcome of your calculation means...... 😎

[@mohsinbaig2195]

Will you tell me that you have a video on Bad and Doubtful Debts? Bank Reconciliation? If yes, then tell me the name of Playlist kindly I can't find it there are so much Playlists in your channel and I wanna learn that topics asap. Thanks 😊

[@TheFinanceStoryteller]

Hello! I do have a video on bad debt accounting (as well as related topics like DSO) in this playlist: kzbin.info/www/bejne/p2i6maWVdpmXqKc I haven't covered bank reconciliation in any video yet, but there are plenty good quality finance channels that have!

[@mohsinbaig2195]

@@TheFinanceStoryteller OK I got it. Thanks a lot ✨♥️

[@Vlad.A_PT]

Thank you, so much! 🙏🏼

[@TheFinanceStoryteller]

Any time! 😊 Happy to help!

[@guiguiba2005]

What if a company has two types of revenue (example: services in general and resale of hardware). I cannot simply divide cogs by total revenue, right? I would have to divide only whats related to resale/cogs

[@TheFinanceStoryteller]

Correct. Try to account for the COGS for each "business unit" separately, then calculate gross profit amount and divide by revenue amount.

[@uranvela7548]

Kudos man!

[@TheFinanceStoryteller]

Happy to help!!!

[@aishamursalova1824]

In a period, sales are $140,000, purchases $75,000 and other expenses $25,000. What is the figure gross profit for the year?

[@TheFinanceStoryteller]

That sounds like you are posting your homework question for me to solve.

[@aishamursalova1824]

@@TheFinanceStoryteller Yea, u got it right🙃

[@moflovemayimbe4177]

Hey sir do you know Equity corporation group

[@TheFinanceStoryteller]

Nope, have not heard of them.

[@videospride8439]

Wtf 81% gross profit margins for tech company. I never knewed it.

[@TheFinanceStoryteller]

Yep! Facebook at 81% Gross Margin, 38% Operating Margin, and 34% ROS, in 2020. By comparison, software company Adobe made 87% Gross Margin in 2020 (higher than Facebook), and 33% Operating Margin (lower than Facebook).....

[@videospride8439]

@@TheFinanceStoryteller thanx for telling

[@TheFinanceStoryteller]

@@videospride8439 You're welcome! I find the "P&L footprint" of companies fascinating, and have made a video comparing GM% and OM% of 4 very different types of company: kzbin.info/www/bejne/jHSwe619ZqaUjqM

[@hilalahmed1005]

Finance story teller do you have email?

[@TheFinanceStoryteller]

Yes, see the "About" tab on my channel page.

[@sik2185]

THE COST ARE VAT INCLUDED? THE SALES ARE VAT INCLUDED? NOBODY CANT EXPLAIN

[@TheFinanceStoryteller]

Both excluding VAT, assuming the business is VAT registered.

[@sik2185]

@@TheFinanceStoryteller I buy wine for £700 ex VAT and I sell for £1200 Inc Vat. So how much is the gross profit?

[@TheFinanceStoryteller]

@@sik2185 That depends on the VAT rate. If that is 20% for example, then you would sell ex VAT for 1000 GBP. That would be 30% gross profit (300/1000).

[@sik2185]

@@TheFinanceStoryteller ok that's fine. But the important I want to know if gross profit has not VAT included

[@TheFinanceStoryteller]

@@sik2185 Excluded. Use the 700 GBP and 1000 GBP in your example.