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  3. Financial Forecasting in Python

Exercise

Calculating gross profit

Gross profit is the amount of money you generated in sales minus the cost of selling those goods (Also know as Cost of Goods Sold or COGS). COGS does not include administration or marketing costs, only costs directly related to production or providing the good or service, so Gross Profit is a good metric to see the core profitability of any product\service.

\(Gross\,Profit = {Total\,SalesValue}-{Total\,COGS}\)

Gross profit margin is the gross profit expressed as a percentage of sales, which is valuable for analysis and decision making.

\(Gross\,Profit\,Margin = \frac{Gross\,Profit}{SalesValue}\)

As the manager of a factory, you have been asked to check the gross profit forecast for the following year.

Instructions 1/2

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  • Set sales and cogs variables to 8000 and 5400, respectively.
  • Using the formulas, calculate the gross profit gross_profit and print the gross_profit result.