Finance

Should amortization be deducted from sales for the calculation of gross profit?

Guest Writer
Entrepreneur, Business Planner and Angel Investor
min read
Opinions expressed by Entrepreneur contributors are their own.
I'm used to the term gross margin rather than gross profit. You subtract only the cost of sales, also called direct costs, or unit costs . . . those things that go up and down with sales.

Some special industries include amortization as direct costs, like rental business--but that's rare.

And then some people talk about gross profit as gross margin less expenses. In that case, amortization, which is an expense, would count.

Tim

More from Entrepreneur

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.