Net Profit Calculator

Calculate gross, operating, and net profit from revenue and expenses. See all profit margins.
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Gross Profit

$650,000.00

65.0% margin

Operating Profit

$350,000.00

35.0% margin

Net Profit

$250,000.00

25.0% margin

Income Statement

Revenue$1,000,000.00
Cost of Goods Sold- $350,000.00
Gross Profit$650,000.00
Operating Expenses- $250,000.00
Depreciation- $50,000.00
Operating Profit (EBIT)$350,000.00
Interest Expense- $25,000.00
Pre-Tax Profit$325,000.00
Taxes- $75,000.00
Net Profit$250,000.00

Profit Margins

Gross Margin65.0%
Operating Margin35.0%
EBITDA$400,000.00
EBITDA Margin40.0%
Net Margin25.0%

Use the Net Profit Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Our Net Profit Calculator helps you dissect your business's financial health by breaking down revenue into gross, operating, and net profit. Understanding these profit levels is crucial for strategic decision-making, especially as businesses navigate a projected 3.5% global economic growth in 2026, ensuring you maximize profitability amidst evolving market conditions. It provides a clear picture of your operational efficiency and ultimate financial success.

This calculator employs a cascading profit calculation methodology. Gross Profit is derived by subtracting the Cost of Goods Sold (COGS) from Revenue. Operating Profit then subtracts Operating Expenses (OpEx) from Gross Profit. Finally, Net Profit is determined by deducting Interest and Taxes from Operating Profit, providing a comprehensive view of profitability after all direct and indirect costs.

When using the calculator, ensure you accurately categorize your expenses. A common mistake is lumping COGS into operating expenses, which distorts your gross profit margin. Remember that non-operating income or expenses, like one-time asset sales or extraordinary losses, are typically excluded from operating profit calculations but included in net profit.

Example: 2026 Tech Startup's Q1 Profitability

  1. 1 Step 1: Input Q1 2026 Revenue of $750,000, Cost of Goods Sold (COGS) of $280,000, Operating Expenses (including salaries, rent, marketing) of $250,000, Interest Expense of $15,000, and Taxes of $45,000.
  2. 2 Step 2: Calculate Gross Profit: $750,000 (Revenue) - $280,000 (COGS) = $470,000. Calculate Operating Profit: $470,000 (Gross Profit) - $250,000 (Operating Expenses) = $220,000. Calculate Net Profit: $220,000 (Operating Profit) - $15,000 (Interest) - $45,000 (Taxes) = $160,000.
  3. 3 Step 3: Intermediate results show a Gross Profit of $470,000 (62.67% gross margin) and an Operating Profit of $220,000 (29.33% operating margin).
  4. 4 Step 4: The Tech Startup's Net Profit for Q1 2026 is $160,000, resulting in a Net Profit Margin of 21.33%. This indicates a healthy profitability level after all expenses and taxes, reflecting efficient operations and cost management within the quarter.

Source: SBA — Business Guide · Last updated: April 2026

Frequently Asked Questions

What is the difference between gross profit and net profit?
Gross profit is revenue minus cost of goods sold (direct costs). Net profit is what remains after all expenses: COGS, operating expenses, interest, and taxes. A company can have strong gross margins but weak net profit if operating expenses or debt costs are high.
What is a good net profit margin?
It varies widely by industry. Software companies average 20-30% net margins. Retail averages 3-5%. Restaurants average 3-9%. Professional services average 10-20%. Generally, double-digit net profit margins are considered healthy for most industries.
How do I calculate net profit margin?
Net profit margin = (net income / total revenue) x 100. If your business earned $500,000 in revenue and $75,000 in net income, your net profit margin is 15%. Track this quarterly and compare to industry benchmarks.

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