Gross Profit vs. Net Income

Understanding the Difference Between Gross Profit vs. Net Income

Profit occurs when a company’s sales revenue exceeds expenses. There are three main types of profit: gross profit, operating profit, and net profit. If you work in accounting, understanding these concepts is essential for analyzing the financial health of your organization and devising sound approaches to achieve revenue goals. This article defines gross profit vs. net income and profit margins and examines their four key differences.

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