When we subtract the price of sold commodities from an organization’s total income, it is called gross profit. It is an imperative mark to analyse how efficiently does the management of the company use the man force and raw material supply in the production process, to churn out the maximum output possible, as it becomes an important aspect to go through when calculating the merits of a company. On a micro level working, it is used to calculate the gross profit margin, which easily fluctuates from industry to industry. This is one of the most important economic concepts to be learnt for getting a hold of the financial details of running a new business. And the tool you can use to maintain the gross profit is mark up. As put in a formula, Gross Profit = Sales ? Cost of Goods Sold.