Gross profit and operating profits are two different values as gross profit only cater direct expenses to produce goods while operating profit is calculated after deducting indirect expenses and selling and administration overall called operational expenses to arrive at operating profit
Example:
Sales xxxx
Less:Purchases xxxx
Gross Profit xxxx
Less:
Selling Expenses xxxx
Admin Expenses xxxx
other expenses xxxx
Operating Profit xxxxx
If there is no selling, admin or other expenses then gross profit and operating profit will be same.
Positive Operating income will result if gross profit exceeds operating expenses
gross profit
Is the top line and GOP the same
Sales Les: Cost of goods sold Gross Profit Less: Operating Expenses Operating Income
net operating income
Positive Operating income will result if gross profit exceeds operating expenses
gross profit
Is the top line and GOP the same
The difference is, that gross profit includes deduction from manufacturing cost. Sales value - Rawmaterial - Freight = Fluctuating Profit - Manufacturing Cost - Procurement = Gross Profit - Operating Expenses = Operating Profit
Profit is calculated by subtracting operating costs from gross revenues.
Gross operating profit, or GOP, describes the current line 'Income After Undistributed Operating Expenses' under the Uniform System of Accounts for the Lodging.
Gross Margin = (Gross Profit/Sales)*100 Gross Profit = Sales - Cost of Sales Or in words, the Gross Margin is an expression of the Gross Profit as a percentage of Sales, where the Gross Profit is Sales minus the Cost of Sales.
Gross and Net profit are virtually the same. They both calculate EBT, earnings before taxes - all overhead and salaries.
Sales Les: Cost of goods sold Gross Profit Less: Operating Expenses Operating Income
Cost of goods plus gross profit margin equals to total sales revenue of firm.
nett
net operating income