Gross profit can be calculated by subtracting which of the following from revenue?

Gross profit is defined as the amount remaining from revenue after deducting the costs directly associated with producing goods or services sold by a company, often referred to as the cost of sales or cost of goods sold (COGS). Therefore, to calculate gross profit, one must subtract the cost of sales from total revenue.

This metric is vital as it reflects the company's efficiency in producing its goods and serves as a key indicator of financial health, guiding investors and management in assessing profitability. Focusing narrowly on the operational side of the business, gross profit specifically excludes operating expenses, non-operating expenses, and taxes, as those costs do not directly relate to the core production process.