Sales Revenues Less The Cost of Goods Sold

Sales Revenues Less the Cost of Goods Sold / Cost of Sales is equal to Gross Profit or Gross Income or Gross Loss.

Mathematically, we can write as shown below:

                           Gross Profit / Gross Loss = Sales - Cost of Sales

This equation is used to calculate Gross Profit or Gross Loss on Income Statement or Trading Account.

If Cost of Goods Sold is more than Sales, then there is Gross Loss and the business is facing the loss during the accounting cycle.