Revenue is everything customers paid. Take off what it cost to make or buy what was sold and you have gross profit; as a share of revenue, that's the gross margin. Take off everything else it costs to run the business — staff, rent, marketing — and you have operating profit, and the operating margin. After interest and tax, what's left is net income: the profit that belongs to shareholders.
Each step can take a big bite. A supermarket might keep 25p of every £1 after paying for its stock and around 3p after everything else. The Financials table in a holding's detail shows revenue, cost of sales and gross profit for the last three reported years. Running costs, interest and tax haven't come out of that gross profit yet, so it will always look much bigger than the company's reported net income. Banks don't report a cost of sales, so for a bank both cost of sales and gross profit read N/A.
An illustrative supermarket's £1 of sales, all the way down.
Educational content only. It is not personal financial advice.