What Is Gross Margin?
Gross margin shows how much of each rupee of sales is left after the direct cost of making or buying what you sold.
Read guide →Revenue vs Profit
Revenue (also called sales or turnover) is the total money your business earns from selling products or services. Profit is what is left after you subtract your costs.
A business can have high revenue and still lose money if its costs are higher. Watching profit, not just sales, tells you whether the business is actually healthy.
Formula
Profit = Revenue − Total Costs
Example
Sales of ₹5,00,000 with total costs of ₹4,20,000 give a profit of ₹80,000, a 16% profit margin.
Frequently asked questions
Which matters more, revenue or profit?
Both matter, but profit shows whether the business can sustain itself. Growing revenue without profit can be risky.
Can revenue grow while profit falls?
Yes, if costs, discounts or returns rise faster than sales.
More guides
What Is EBITDA?
EBITDA measures operating earnings before interest, tax, depreciation and amortization.
Read guide →Gross Profit vs Net Profit
Gross profit subtracts only direct costs. Net profit subtracts everything.
Read guide →BizCalc provides calculators and educational information for general informational purposes only. Results are estimates and should not be considered financial, tax, accounting or investment advice.