The gross profit method is a way to calculate ending inventory. Counting your inventory each month can be costly and timely, so by using the gross profit method, you can estimate approximately ...

Gross profit is the profit a company makes after deducting the costs of making and selling its products or services. It's also referred to as gross income.

Using the previous example, if your total weekly sales revenue is $10,000 and your cost of goods sold is $3,375, your company's total weekly gross profit is $6,625, or 10,000 minus 3,375.