Final answer:
Gross profit is revenue minus cost of goods sold, operating profit is revenue minus both COGS and operating expenses, and net income is revenue minus all expenses.
Step-by-step explanation:
Accounting profit, gross profit, operating profit, and net income are all measures of a company's profitability, but they differ in terms of the costs they include and the calculations used.
Gross profit is the revenue remaining after subtracting only the cost of goods sold (COGS) from the total revenue. It represents the direct profitability of a company's core operations.
Operating profit is the revenue remaining after subtracting both COGS and operating expenses from total revenue. It reflects the profitability of a company's operations, including both direct and indirect costs.
Net income, also known as net profit, is the revenue remaining after subtracting all expenses from total revenue, including COGS, operating expenses, interest, and taxes. It represents the overall profitability of a company.