Gross profit equation is an important calculation for businesses to understand their profitability. It’s the difference between a company’s sales revenue and its cost of goods sold (COGS). The formula looks like this: Gross Profit = Net Sales – Cost of Goods Sold. This equation gives business owners insight into how much money they are bringing in from selling their products and services, minus what it costs to make or acquire them. It allows leaders to assess their pricing strategies and pinpoint areas where they can grow. Knowing your gross profit equation can help you maximize your business success!