Resolved: Cost of Goods Sold
Total Revenue - COGS = Gross Profit, but the Total Revenue =net sales (revenue from core business) + other revenue (revenue from non-core business). Why are we considering Total Revenue, instead we should consider just the Net Sales - COGS = Gross Profit ?
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Hi Arvind,
this is just to illustrate that there are two types of revenue in Total Revenue (from core and non-core activities).
You are right that Gross profit = Revenue from core activities - COGS.
Yet, for illustrative purposes only (and simplification), we work with the total revenue figure throughout the example.
Simplified, Gross profit = Revenue - COGS, this is the important formula to remember from this lesson.
I hope it makes sense.
Best,
The 365 Team
Ha
Haaa
Gross profit =Revenue -COGS