How Do You Calculate Gross Sales?

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According to AccountingTools, gross sales are calculated by adding up the revenue from all sales transactions without taking into account any costs. This is in contrast to net sales, which subtract costs like operating expenses or taxes.

As described on Investopedia, gross sales are a particularly important metric for companies that are in the retail sector. Because gross sales do not include any of the operating expenses, taxes or other overhead costs, this business metric provides retail companies with a way to compare their sales against competition. Gross sales are also useful in determining consumer spending habits over a given period of time.