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Gross profit is defined as the difference between revenue and the cost of goods sold (COGS). This financial metric provides insight into a company's efficiency in producing and selling its products. Specifically, gross profit indicates how well a business is managing its production costs relative to its sales revenue. By calculating gross profit, businesses can assess their production efficiency and pricing strategy.

The formula can be expressed as:

Gross Profit = Revenue - COGS

This definition highlights that gross profit does not take into account operating expenses, taxes, or other income and expenses, which are included in other measures such as operating income or net income. Focusing solely on revenue and COGS allows businesses to pinpoint how well they generate profit from their core operations related to the goods they produce and sell.

The other options describe different financial concepts that do not accurately represent gross profit, such as net income or total assets in comparison to liabilities, which are important but distinct measures in assessing a company's overall financial health and performance.