Gross Profit is the total revenue of your company minus the cost of goods sold.
Gross profit is a fundamental metric that is used to determine the health of your company. It is a good indicator of how much money your company is making, and how much money it is spending.
Gross profit is calculated by taking the total revenue of your company and subtracting the cost of goods sold.
Cost of goods sold is the total cost of the products or services that your company sells. This includes the cost of the product itself, as well as any shipping fees, taxes, or other costs associated with the sale.
For example, if your company sells a product for $100, and the cost of the product is $70, your cost of goods sold is $70.
If your company sells a product for $100, and the cost of the product is $70, and you charge $5 for shipping, your cost of goods sold is $75.
If your company sells a product for $100, and the cost of the product is $70, and you charge $5 for shipping, and you charge $5 for taxes, your cost of goods sold is $80.
It can be difficult to calculate Gross Profit directly inside of Xero; that's where Causal comes in.
Causal is a modelling tool which lets you build models on top of your Xero data. You simply connect Causal to your Xero account, and then you can build formulae in Causal to calculate your Gross Profit.
Causal lets you build models effortlessly and share them with interactive, visual dashboards that everyone will understand.
In Causal, you build your models out of variables, which you can then link together in simple plain-English formulae to calculate metrics like Gross Profit. This makes your models easy to understand and quick to build, so you can spend minutes, not days, on your models.
When you're done, you can share the link to your model with stakeholders. They'll be able to view your model's outputs in a visual dashboard, rather than a jumble of tabs and complex formulae. The dashboards are interactive, letting viewers tweak your assumptions to see how they affect the model's outputs.
Causal lets you add visuals in a single click, letting you plot out graphs and distributions for metrics like Gross Profit.