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Metrics · Income statement

Gross profit explained (PSX)

In simple wordsMoney left after paying direct costs to make or buy what was sold.

Income statement

Statement family

3

Sample tickers to try

3

Related metrics

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Definition

Gross profit is roughly sales (revenue) minus the direct cost of making or buying what was sold. It sits above operating expenses on many income statements.

When this looks weak or down

Can shrink when raw materials, fuel, or import costs rise faster than selling prices - or when the mix shifts to lower-margin products.

Purpose & when you need it

Purpose

Gross profit shows whether the core product or service still leaves room after direct costs - before overhead, interest, and tax.

When you need it

Use it when a P&L period is stored with revenue and cost of sales (or a reported gross profit line).

Where it appears & why people look

Where

Books → Income on the company research page when P&L is stored.

Why people look

People study gross profit to see whether the core product/service still leaves room after direct costs - before overhead, interest, and tax.

Formula (simple)

Gross profit ≈ revenue − cost of sales (or cost of goods sold). Gross margin ≈ gross profit ÷ revenue.

Traps (tip culture)

A rising share price with falling gross profit can still look “hot” on WhatsApp. One quarter of high gross profit does not equal a tip. Banks and some service names may present income differently - read the sector’s filing style.

On our desk

Income-statement lines appear in Books when a period is stored. If P&L is missing, stay on this desk’s Filings checklist - we never invent sales.

Related

Related metrics

FAQ

Is gross profit the same as net profit?

No. Gross profit is before many operating costs, interest, and tax. Net profit (PAT) is further down the statement.

What is gross margin?

Gross margin ≈ gross profit ÷ revenue. It is a study ratio for the same period - not a buy signal.

Why might banks look different?

Bank P&Ls emphasise interest income and provisions more than “cost of goods sold.” Read the sector filing style before comparing to a cement company.

Continue on high-volume hubs

Stay on the high-volume path: market today → stock list → company share price → beginners / metrics - tip check when a forward arrives.