Gross Profit Calculated, also known as ‘gross margin’, is the total income of your business minus the cost of producing goods and services. In other words, it’s the amount of money you have left over after covering your direct expenses. The figure can be calculated by deducting Cost of Goods Sold (COGS) from total sales revenue. To put it simply, it’s the difference between what you earn and what you spend. This calculation is a key indicator for the financial health of a business and helps to provide insight into whether a business is profitable or not.