If a company produces tangible goods, most business email list of the cost comes from the production of the product (note that service companies and software companies generally don't have material costs, but you'll want to ask the finance department to see if there are costs in this area).
All "production specific" costs are referred to as cost of goods sold (COGS), which represent costs directly attributable to the production of the product, as well as overhead in the production of the product. Cost of goods sold usually includes the cost of raw materials, labor costs associated with assembling the product, and various direct and indirect overheads such as rent, electricity, etc.
Raw materials + labor + overhead = cost of goods sold
Gross profit (also commonly referred to as gross profit) is the revenue earned directly from the sale of a product, minus the cost of goods sold from gross revenue, or gross profit.
Gross profit is very important because it is an important measure of product profitability. For product managers and their cross-functional teams, gross profit is often the only reasonable measure of product profitability. Gross profit must be large enough to cover expenses incurred by other divisions to support this product, and there must be a net profit at the end of the financial cycle. The absolute value of gross profit and its share of total revenue is also an important criterion for comparing the performance of different products (within the same product portfolio) and comparing with competitors.
Total Revenue - Cost of Goods Sold = Gross Profit
Gross Profit/Total Revenue = Gross Profit Margin
The balance sheet indicates that the state of the entire company is in balance. Just like the human body, the balance sheet must be in a state of equilibrium, or homeostasis, for a business to function properly. A balance sheet has a basic arithmetic formula or equation as shown below. The bottom half of the income statement lists the expenses of different functional divisions, namely operating expenses.
Operating expenses are categorized by functional departments, including sales, marketing, research and development, customer service, IT, and other operations. There is also a "general administrative fee", usually borne by all products, allocated to the product line income statement according to a pre-determined algorithm.
After operating expenses are removed, the next stage of the product's profit needs to be calculated, which is called earnings before interest, tax, depreciation and amortization (EBITDA). In some companies, it's called "operating earnings." This section separates interest and taxes from the actual operating income statement.