IN PLAIN ENGLISH
The money left from sales once the company has paid for what it sold. Staff, rent, marketing, interest and tax haven't come out yet, so it is always much bigger than the profit that ends up belonging to shareholders.
FULL DEFINITION
Revenue minus the cost of sales: what's left after paying for the goods or services a company sold, before running costs, interest and tax.
EXAMPLE
Revenue of £1,000m and cost of sales of £600m gives £400m of gross profit, a 40% gross margin.
HOW IT'S CALCULATED
Worked out by the app for each of the last three reported years: Gross profit = revenue − cost of sales, both from the company's annual income statement via the market data provider and shown in millions. It is not net income. Shows N/A when the company reports no cost of sales, as banks and insurers don't.
Educational content only. It is not personal financial advice.