When Gross Operating Profit (GOP) is stated as 30%, it indicates that 30% of total revenue is remaining after covering the operational expenses necessary to generate that revenue. In the context of financial metrics, the GOP is typically expressed as a percentage of the total revenue.
To understand this better, consider that total revenue is the complete amount earned from sales before any costs are deducted. If we have a GOP of 30%, this means that 30% of the total revenue is retained as profit after expenses are accounted for. By definition, this results in the total revenue being considered as 100%.
Consequently, the implication of a GOP of 30% directly ties back to total revenue being the full value, or 100%, from which all expenses have been deducted to arrive at the profit figure. Thus, when interpreting the relationship between gross operating profit and total revenue, the correct understanding is that total revenue equals 100% of itself.