# Accounting terms

### Sales vs. Revenue

`Sales <> Revenue`

- Sales is revenue generated from selling products or services to customers

- But it's not necessarily *all* of the Revenue of a company because Revenue can be generated in other ways, specifically:

- Non-operating revenue like income from the sale of assets, interest, royalties, etc

### Gross Sales vs. Net Sales

`Gross Sales <> Net Sales`

- Gross sales is the total amount of sales for a company

- Net sales subtracts things like returns

### Gross Profit

`Gross Profit = Net Sales - COGS`

### Gross Margin

`Gross Margin = Gross Profit / Net Sales`

`Gross Margin = (Net Sales - COGS) / Net Sales`

First calculate Gross Profit by subtracting COGS from Net Sales, then divide that number by Net Sales to get a number between 0 and 1. This percentage is the Gross Margin.

### Net Profit

Also known as

- Bottom line

- Net income

- Net earnings

A measure of profitability after all costs and taxes. This is the actual profit after deducting operating expenses that are excluded from gross profit.

##### Source:

- Me