I notice that some financial reports miss gross profit or cost of revenue.
This often happens in Software companies. Does this mean the cost of revenue is zero?
I attached a financial report for reference.
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Sign up to join this communityI notice that some financial reports miss gross profit or cost of revenue.
This often happens in Software companies. Does this mean the cost of revenue is zero?
I attached a financial report for reference.
Does this mean the cost of revenue is zero?
Probably not, but it may be insignificant (e.g. < 1% of gross profit). If the software is completely online (e.g. no CDs or packaging) then I could see a very small COGS, and all costs would be indirect (salaries, R&D, advertising, etc.). It's also possible that the company does not allocate direct labor (if there is any) to gross profit.
Depending on what you're using gross profit for, you might be okay using just Revenue, but be sure to watch this company to make sure it isn't an outlier that skews your results.
COR is "the total cost of manufacturing and delivering a product or service to consumers".
For a software company, that seems to be Engineering and product development
(the manufacturing) plus maybe Customer operations
(if that's delivering the product to the consumer).