Gross profit might suggest strong performance, but companies must also consider “below the line” costs when analyzing profitability. It can be limiting since it only takes into account the profitability from COGS and not additional relevant data, such as rising material costs or labor shortages. For example, a low gross profit in a service company with minimal cost of goods sold might not necessarily indicate poor performance. You’ll need to know your total revenue and cost of goods sold before determining your gross profit. Through a series of example sentences with the word “gross,” we will illustrate its flexibility and diverse applications in everyday language. In this article, various example sentences have been provided to demonstrate the use of the word “gross”.
- (80) The management team is working on strategies to improve the gross profit margin.
- (90) The company’s gross profit margin is expected to improve next quarter due to cost-saving initiatives.
- A $3 cost would be attributed to each widget under absorption costing if a factory produces 10,000 widgets and pays $30,000 in rent for the building.
- (59) Despite the decrease in gross profit, the company was able to maintain its market share.
- A company should calculate its gross profit monthly, quarterly, and annually for a clear idea of its financial health.
Quiz Time!
(82) The company’s gross margin improved after implementing efficiency measures in the production process. (63) The gross margin is calculated by subtracting the cost of goods sold from the revenue. (42) The company’s gross margin decreased due to an increase in production costs. (102) The management team used vertical analysis to evaluate the impact of changes in pricing on the company’s gross profit margin. (96) The vertical analysis of the income statement indicated a decrease in the company’s gross profit margin. (87) The company’s gross profit margin improved significantly after implementing cost-cutting measures.
- (35) The gross margin is a measure of profitability before operating expenses.
- So, pay attention, because here are some essential tips, common mistakes to avoid, examples of different contexts, and even a few exceptions to the rules when using Gross Profit.
- (19) The income account is used to calculate the company’s gross profit margin.
- Dani’s Apparel retains about 42.9% of its revenue after covering the direct costs of production.
- (32) The company’s gross profit margin decreased due to increased production costs.
- (186) Despite a decrease in gross profit, the company’s net income increased due to cost-cutting measures.
- As mentioned earlier, it refers to a lump sum payment or a total amount that is paid or received without any breakdown or itemization..
How to Calculate Gross Profit: Formula and Examples
COGS does not include indirect costs such as marketing expenses, administrative retained earnings balance sheet salaries, or general selling expenses. Businesses track COGS through inventory records, production cost sheets, and supplier invoices. (94) The company’s gross profit margin exceeded industry standards, signaling strong financial performance. (92) The gross profit margin is a measure of a company’s profitability before deducting operating expenses. (80) The profit statement displayed a decline in gross profit margin due to rising material costs.
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(68) The gross profit in a sentence gross margin is calculated by subtracting the cost of goods sold from total revenue. (49) The company’s gross margin was negatively impacted by rising production costs. (82) The company’s gross profit margin was negatively affected by an increase in raw material costs. (32) The company’s gross profit margin decreased due to increased production costs. (174) The company’s gross profit margin was negatively affected by an increase in raw material costs.
- Moreover, tracking changes in gross profit margins over time can provide valuable insights into a company’s operational efficiency and market competitiveness.
- A key measure of efficiency, gross profit measures the profit a business makes after subtracting the cost of goods sold (COGS) from the total revenue.
- (69) The cost of goods sold is an essential component in determining a company’s gross margin.
- “Our proven scale efficiencies have been enhanced by our investment in AI, which has driven down operating expenses and improved gross profits,” it said.
- (136) A low gross profit margin may indicate that a company is struggling to generate profits.
Examples of “Gross-profit” in a Sentence YourDictionary com
(184) A company with a consistently low gross profit margin may need to reevaluate its pricing structure. (179) The gross profit margin is a Bookkeeping vs. Accounting useful tool for comparing the profitability of different companies. (146) The cost of goods sold is deducted from a company’s revenue to calculate its gross profit. (141) A higher gross profit margin allows for increased investment in research and development.
