# Profit reporting terms

Profit reporting in Stocky is largely based on the Shopify reporting feature, but with two additional values: the of cost of goods sold (COGS), and profit margin.

Here are some of the most commonly used terms that you encounter when calculating profits, and how certain calculations work.

### Net quantity

The net quantity is the total number of units sold within a selected date range, with refunds deducted.

### Gross sales

Gross sales are calculated by multiplying the product price by the quantity of the product. The product price for this equation is the price before taxes, shipping, discounts, and returns.

### Discounts

Discounts are calculated in Stocky reports by adding the line item discount to the order level discount share, for a collection of sales. Order-based discounts are applied before taxes. Discounts are created using discount codes in your Shopify admin's **Discounts** section, and not by using the **Compare-at price** option.

### Returns

Returns are reported as the value of the goods returned within a selected range.

### Net sales

Net sales are calculated by subtracting both discounts and returns from the gross sales.

### Tax

Tax in Stocky is reported as the total amount of taxes collected on orders.

### Total sales

Total sales are calculated in Stocky subtracting discounts and returns from the gross sales, and then adding returns, taxes, and shipping charges.

### Cost of goods sold

The cost of goods sold (COGS) is calculated by multiplying the net quantity of a product by the average cost price of the product.

### Gross profit

Gross profit is calculated by subtracting the cost of goods sold (COGS) from the gross sales.

### Gross margin

Gross margins are calculated by subtracting the cost of goods sold (COGS) from the gross sale, then dividing it from the gross sales, and then multiplying that number by 100.