Dear all,
going through the income statement part I was wondering why SGA are included in the gross profit and the gross profit margin, since they are part of the OpEx.
I believe what you call Gross Profit in the example should be Operating Profit. (?)
Hello!
Yes, and I found that very confusing too.
At the end of the day, when you case for consulting, it´s clearer than this, since you normally just talk about “margin”, and it´s clear what comes into that metric.
Cheers,
Clara
Hi there,
You're right.
It stands to show that sometimes the answers in case books are wrong, so take them all with a pinch of salt.
Best,
Cristian
Hi there,
Per investopedia, “Gross profit only includes the costs directly tied to the production facility, while non-production costs like company overhead for the corporate office is not included”
In sum, you are correct :)
Hi,
Could you update the content differentiating gross profit from operating profit?
Currently it is really confusing.
Best.
(edited)
Yes, you are correct.
