# How to Calculate Gross Profit of a Deli

Profitability is an essential gauge of the health of a business. Before you calculate the gross profit of a deli, it is essential to understand the difference between gross profit and net profit. Gross profit is the difference between the amount it cost the business to buy the items that are sold in the deli and the amount of revenue the sale of those items brought in. Net profit is the difference between the gross profit and the amount remaining after all other expenses--including wages, freight, store overhead and spoilage--are all deducted.

## Things You Will Need

Spreadsheet program

Calculator

Pen

Paper

## Step 1.

Determine the period of time for which you would like to calculate the deli's gross profit. For example, if you want to calculate the gross profit for the first three months of 2014, write down "January-March 2014." If you would rather use a spreadsheet for your calculation, enter this information as a header into your spreadsheet.

## Step 2.

Calculate the total sales of all of your items for the period in question. If you sold items in several product categories, determine the individual figures for each item. For example, if you sold $2,400 worth of ham and $3,500 worth of beef during that period, write down $2,400 and $3,500. Note that if you track your sales daily, you may have to add up the daily sales figures to arrive at a figure for the period.

## Step 3.

Determine the cost to purchase the items that have sold. You need not include the stock of meat or other items that were available but did not sell. Use your expense reports or purchase receipts to determine your costs. Write down the individual cost of each item. For example, if you spent $1,600 on the ham and $2,400 on the beef that was sold, write this down underneath the sales figures laid out in Step 2. Write the total cost of product on the paper or enter it into the spreadsheet underneath the total sales.

## Step 4.

Subtract the total sales of your deli from the total costs of the products you sold. The result is the gross profit of the deli. For example, if your deli consisted only of the ham and beef products listed in Steps 2 and 3, you would add the sales of $2,400 and $3,500 together to get a total sales figure of $5,900. Add the costs of $1,600 and $2,400 together to get a total cost figure of $4,000. Subtract $4,000 from $5,900. You would then be left with a gross profit of $1,900.