Gross sales--represent the retailer's total sales, including sales for cash or for credit.
Returns and allowances-- represent reductions from gross sale. The retailer makes a financial adjustment for customers who became dissatisfied with their purchases and returned the merchandise to the retailer. Since these reductions represent cancellations of previously recorded sales, the gross sales figure must be reduced to reflect these changes
Net sales--gross sales less returns and allowances which represent the amount of merchandise the retailer actually sold during the given time period.
Cost of goods sold--the cost of merchandise that has been sold during the period.
Gross margin--the difference between net sales and cost of goods sold or the amount available to cover operating expenses and produce a profit.
Operating expenses--all the expenses that a retailer incurs during the normal course of operating the business other than the cost of the merchandise sold (i.e., payroll, rent, utilities, advertising, depreciation, supplies, taxes, interest paid, repairs, and insurance).
Operating profit--the difference between gross margin and operating expenses.
Other income or expenses--includes income or expense items that the firm incurs, outside the course of its normal retail operations (e.g., sale of a retail store, stock, etc.).
Net profit--operating profit plus or minus other income or expenses. Net profit is the figure upon which the retailer pays taxes and thus is usually referred to as net profit before taxes.