How to use the Net Profit Calculator
Enter your revenue, the cost of goods sold and your operating expenses for the same period. The result is the profit left over.
Worked example
A shop with $50,000 in sales, $30,000 in stock costs and $12,000 in rent, wages and other expenses makes 50,000 − 30,000 − 12,000 = $8,000 net profit. That is a net margin of 16%. Its gross profit, before operating expenses, is $20,000 or 40%.
Gross profit versus net profit
Gross profit shows whether your products are priced well. Net profit shows whether the whole business is. A company can have healthy gross margins and still lose money if overheads are too high. Track both, and compare them over several months rather than judging a single one.
The formula
Net profit = revenue − cost of goods sold − operating expenses
Examples
- Revenue 10,000, COGS 6,000, expenses 1,200
Net profit: 2,800
- Revenue 250,000, COGS 140,000, expenses 68,000
Net profit: 42,000
- A loss: revenue 18,000, COGS 11,000, expenses 9,500
Net profit: -2,500
Limitations and assumptions
Only includes the costs you enter. Add interest, taxes and one-off costs to expenses if you want the full bottom line.
Frequently asked questions
How do I calculate net profit?
Revenue − cost of goods sold − operating expenses.
Does it include tax and interest?
No, this version stops at operating profit. Subtract tax and interest separately.
Net profit or gross profit?
Gross profit ignores operating expenses.
Can it be negative?
Yes, that is a net loss.