Business Finance
Net Profit Calculator
Calculate your true bottom-line net profit — and gross and operating profit along the way — by deducting all costs, expenses, interest, and taxes from revenue.
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
Gross Profit = Revenue − COGS
Operating Income (EBIT) = Gross Profit − Operating Expenses
Net Profit = Operating Income − Interest & Other Expenses − Income Taxes
Net Margin % = (Net Profit ÷ Revenue) × 100
Example: Revenue $500k · COGS $200k · OpEx $150k · Interest $10k · Tax $28k
Net Profit = $500k − $200k − $150k − $10k − $28k = $112,000 (22.4% net margin)
Frequently Asked Questions
- Net profit (also called net income or the bottom line) is what remains from revenue after deducting every expense: COGS, operating expenses, interest payments, and income taxes. It's the most complete measure of profitability.
- Net margin shows how much profit is generated per dollar of revenue after all obligations. A 15% net margin means the company earns $0.15 for every $1.00 of sales. Higher margins signal a more efficient, competitive business.
- High operating expenses (sales team, R&D, administration), heavy debt interest, or large tax liabilities can erode gross profit into a net loss. This is common in growth-stage companies investing heavily in expansion.
- OpEx includes all costs not directly tied to production: salaries of non-production staff, rent, utilities, marketing, depreciation, and R&D. Distinguishing OpEx from COGS is important for correct margin calculations.
- No. Net profit is an accounting figure that includes non-cash items like depreciation. Free cash flow = operating cash flow minus capital expenditures. A profitable company can still have negative cash flow if it's investing heavily in assets.
- Increase prices (raises revenue without necessarily increasing costs), reduce COGS through supplier renegotiation or process efficiency, cut operating overhead, or reduce debt to lower interest expense.