A company needs to know how much they are making in order for them make informed decisions. They can't be spending money if it doesn’t come from somewhere, so knowing your gross profit percentage at all times is important! Gross Profit = Revenue - Expenses  Where revenue includes product sales and discounts but does not include taxes or shipping costs while expenses consist of things like labor wages etc., which we will get into later on when discussing the break-even point (the amount of time/money you need before any profits become available).