What are gross sales?

Gross sales are the total amount of sales a company earned throughout a specific period of time, without taking into consideration any costs involved with running a business. Gross sales do not factor in expenses related to business operations, also known as cost of goods sold (COGS), which get deducted when calculating net sales.

How do you calculate total annual gross sales?

The total annual gross sales formula is so simple it's hardly fair to call it a formula. To figure total annual sales, add up the items sold and multiply by the price, says Business News Daily. If you charge $80 per hour for services and you billed 2,000 hours last year, the total annual gross sales formula says gross revenue was $160,000 .

What is the difference between gross sales and net sales?

The key difference between gross sales versus net sales is that net sales factor in the COGS, or the cost your business paid related to the sale of a product. Businesses typically leave out gross sales numbers on accounting statements because they are not an indication of how well a business is doing.