Gross Profit is the difference between a company's revenue from sales and the cost of goods sold (COGS). It shows how much money a business makes from its core activities before accounting for other expenses like salaries, rent, and marketing. A higher gross profit indicates that a company is effectively managing its production costs and pricing its products well. Understanding gross profit is essential for evaluating a company's financial health. It helps business owners and investors assess how efficiently a company is operating. By analyzing gross profit margins, they can make informed decisions about pricing strategies and cost management to improve profitability.