Question

Gross profit =

Question 6 options:

	Operating income – Other income (expense).
	Operating income – Income tax expense
	Income before income taxes – Income tax expense
	Net revenues – Cost of goods sold

Answer 1

4th option is correct because

Gross profit is company net sales revenue minus its cost of goods sold.

Sales of a company retains after incurring the direct costs associated with producing the goods it's sells and the services it provides.

{ Net revenue means company sales minus discount and returns. Net sales and net Revenue means the same thing. }

{ Cost of goods sold means direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the goods. It excludes indirect expenses. Cost of goods sold is also called cost of sales.}