Gross Profit also called Gross Income or Sales Profit is the income, that company receives after deducting taxes and sometimes costs, associated with delivering product.
Although correct formula for Gross Profit shall also deduce Cost of Goods Sold (e. q. direct labor, commissions for staff, equipment depreciation and other factors), our Advanced Reports by default takes simplified formula.
Cost of product considered as Cost of Goods Sold, and Final (and Special) Price - e. q. price, for which products are actually sold - considered as Invoiced. You can see them at Advanced Pricing section of product record.
Therefore, Profit in Advanced Reports is calculated as Invoiced Subtotal minus Base Cost (calculated as Cost of order item, multiplied by its quantity).
Consider an order with a two products with Cost $29. Product´s Special Price (i. e. actually paid by customer) is $32, then Invoiced Subtotal would be $32 * 2 = $64. Base Cost would be $29 * 2 = $58. Therefore, Profit would be Invoiced Subtotal - Base Cost or $64 - $58 = $6. That is the Profit for one order.
Gross Profit is calculated similarly. Extension calculates all subtotals of orders, then calculates Base Costs for their products, and their difference is the Gross Profit.
Important Notes: Gross Profit can be calculated only when order has an invoice. If there´s no invoice, then there´s no actual payment and actual income. Also, if products were sold just at their Cost (i. e. paid price equals to cost price), then Gross Profit for them would be equal to 0.
Total of Gross Profit for a period you can see at Advanced Reports dashboard in its own widget.
Did you know…
… that having all appropriate data in your Magento 2 store, you can create your own formula of Gross Profit calculation. Our extension offers you Report Builder, which allows you to create special synthetic fields - which are calculated on-the-fly. These fields can be turned into Report, and then - put to the widget on the Dashboard.
Our Advanced Reports extension even can send you reports about Gross Profit via email.