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TOP LINE, GROSS PROFIT & EBIDA


Top line sales, Gross profit, and EBITDA are three important financial metrics that are used to measure a company's financial performance and health.

  1. Top line sales, also known as revenue, refer to the total amount of money a company earns from the sale of its products or services before any deductions are made. It is the first line item on a company's income statement and represents the total sales made.

  2. Gross profit refers to the amount of money a company earns after deducting the cost of goods sold (COGS) from its revenue. It represents the profit a company makes from the sale of its products or services, before taking into account operating expenses such as salaries, rent, and utilities.

  3. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of a company's profitability that takes into account its operating expenses, but excludes non-operating expenses such as interest expenses, taxes, and non-cash expenses such as depreciation and amortization. EBITDA is used to compare the financial performance of companies in different industries and to evaluate a company's ability to generate cash flow from its operations.

In summary, top line sales represent the total sales made, gross profit represents the profit a company makes from the sale of its products or services, and EBITDA is a measure of a company's profitability that excludes non-operating expenses.

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