Gross Profit is the different between the sale prices and the cost of buying or producing the goods. It is calculated as
Gross Profit = Revenue - Cost of Goods Sold
Gross Profit is the numerator in the calculation of Gross Margin:
= Gross Profit / Revenue
= (Revenue - Cost of Goods Sold) / Revenue
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.