EZ Calculators

Profit Calculator

This profit calculator builds a simple profit and loss statement for one period. Enter revenue, returns, direct costs, operating expenses, depreciation, interest and a tax rate. You get gross, operating and net profit, each margin, break-even revenue and the sales needed to hit a profit target.

Calculation and content reviewed by EZ Calculators Editorial Team on .

Enter values

Build one planning income statement for a consistent reporting period. Keep revenue adjustments, direct and variable cost, operating expense, depreciation, financing, estimated tax, break-even, profit target, and prior-period context on separate lines.

Build the scenario below, then calculate for a complete result report.

Runs in your browser
01

RevenueRetain sales after adjustments

02

OperationsSeparate variable and fixed burden

03

Below lineBridge operating profit to net

04

PlanTest target and prior period

Revenue retained in the period

Use one consistent reporting period. Gross revenue is reduced by returns, refunds, rebates, and sales allowances before any profit margin is calculated.
Use sales or service revenue for one consistent reporting period before refunds, returns, rebates, or sales allowances.
Enter reductions that belong against gross revenue; this amount cannot exceed gross revenue.
$

Direct and variable cost behavior

Direct cost and other variable operating expenses are kept separate because the sensitivity model scales both with net revenue at their current percentages.
Use the direct cost assigned to goods sold or services delivered in the same period.
$
Include period expenses that generally move with sales, such as commissions, processing fees, or variable fulfillment not already in direct cost.
$

Operating burden

Fixed operating expenses bridge contribution to EBITDA. Depreciation and amortization remain separate so EBITDA and operating profit are not presented as the same measure.
Include operating expenses treated as fixed within this scenario, excluding depreciation, interest, and income tax entered separately.
$
Enter the period expense used to bridge EBITDA to operating profit.
$

Non-operating and tax assumptions

Other income and interest bridge operating profit to pre-tax profit. The entered tax rate applies only to positive modeled pre-tax profit and is not a tax-return calculation.
Use income outside the modeled core operations, keeping it separate from sales revenue.
$
Enter financing interest for the same reporting period; loan principal payments are not an income-statement expense.
$
Used only as a planning estimate when pre-tax profit is positive; the model does not create a tax benefit for a loss.
%

Target and period comparison

The target solver finds revenue needed for the entered after-tax profit under the current cost behavior. Prior-period values are comparison context only and do not change the current statement.
The calculator estimates revenue needed to reach this after-tax target under the entered cost behavior.
$
Optional comparison amount after prior returns and allowances; use the same period length and accounting scope.
$
Enter a negative number for a prior loss. Keep accounting treatment consistent with the current scenario.
$
Planning statementNot GAAP, IFRS, tax, inventory, or cash-flow reporting
This worksheet uses only the entered classifications and applies a simplified tax estimate. It does not prepare financial statements, determine accounting policy, recognize deferred tax, value inventory, model working capital, or measure cash flow. Reconcile figures with current books and qualified advice.

How do you calculate net profit?

Start with revenue after returns, subtract the cost of goods sold to get gross profit, then subtract operating expenses, depreciation, interest and income tax, and add any other income. $95,000 of net revenue less $45,000 of direct costs is $50,000 gross profit. After every other line in the example below, net profit is $14,400, a 15.16% net margin.

How to use the profit calculator

Pick one period, like last month or last year, and take every number from that same period. Mixing a year of sales with a month of rent is the fastest way to get a profit figure that means nothing.

The fields follow the order of an income statement, so you can copy them straight from your books. Leave a field at zero if it doesn't apply. The target and prior-period fields are optional.

  1. Enter gross revenue for the period and any returns, refunds or allowances.
  2. Enter the cost of goods sold, or the direct cost of delivering your service.
  3. Split the rest of your expenses into variable ones (like commissions and card fees) and fixed ones (like rent and salaries).
  4. Add depreciation, other income, interest and an estimated income tax rate.
  5. Optional: add an after-tax profit target and last period's revenue and profit.
  6. Calculate and read the profit layers, margins, break-even revenue and comparison.

Gross profit and net profit formulas

Profit is always revenue minus costs. The question is which costs. The calculator takes them off in a fixed order. Gross profit checks your pricing, operating profit checks day-to-day running, and net profit is the bottom line.

Every margin uses net revenue (after returns) as the bottom of the fraction. Tax is only charged when pre-tax profit is positive. A loss shows as a loss, with no tax refund assumed.

Formula guide
  • Net revenue = gross revenue - returns and allowances
  • Gross profit = net revenue - cost of goods sold
  • EBITDA = gross profit - variable operating expenses - fixed operating expenses
  • Operating profit = EBITDA - depreciation and amortization
  • Pre-tax profit = operating profit + other income - interest
  • Net profit = pre-tax profit - income tax
  • Profit margin = profit / net revenue x 100

Worked example: $100,000 of sales down to net profit

A business sells $100,000 and refunds $5,000, leaving $95,000 of net revenue. Direct costs are $45,000, so gross profit is $50,000. Variable expenses of $8,000 and fixed expenses of $20,000 bring it to $22,000 before depreciation.

Take off $3,000 of depreciation for $19,000 of operating profit. Add $1,000 of other income, subtract $2,000 of interest, and pre-tax profit is $18,000. At a 20% tax rate that's $3,600 of tax and $14,400 of net profit.

Profit and loss for the default example
LineCalculationAmountMargin
Net revenue$100,000 - $5,000$95,000
Gross profit$95,000 - $45,000$50,00052.63%
EBITDA$50,000 - $8,000 - $20,000$22,00023.16%
Operating profit$22,000 - $3,000$19,00020.00%
Pre-tax profit$19,000 + $1,000 - $2,000$18,00018.95%
Net profit$18,000 - $3,600 tax$14,40015.16%

Gross profit vs net profit

Gross profit is what's left after paying for the goods or the direct work. It tells you whether your prices cover the cost of what you sell. In the example it's $50,000, more than half of net revenue.

Net profit is what's left after everything: overheads, depreciation, interest and tax. In the example it's $14,400, less than a third of gross profit. A business can have a strong gross profit and still lose money if overheads are too high, which is why the calculator shows every layer.

Break-even revenue and target profit

To find break-even, the calculator assumes direct and variable costs stay the same share of sales, while fixed costs, depreciation, interest and other income stay put. In the example, each dollar of sales leaves about 44.21 cents after variable costs, and the fixed burden is $24,000. Break-even net revenue is about $54,285.71, so current sales sit $40,714.29 above it.

For a $10,000 after-tax target at 20% tax, you need $12,500 before tax. Add that to the $24,000 fixed burden and divide by 44.21%, and the required net revenue is about $82,559.52.

Break-even and target for the default example
MeasureCalculationResult
Contribution margin ratio$42,000 / $95,00044.21%
Fixed burden$20,000 + $3,000 + $2,000 - $1,000$24,000
Break-even net revenue$24,000 / 44.21%$54,285.71
Margin of safety$95,000 - $54,285.71$40,714.29
Revenue for $10,000 after tax($24,000 + $12,500) / 44.21%$82,559.52

What happens if sales rise or fall

The results include a table that moves gross revenue up and down by 10% and 20%. Variable costs move with sales, and fixed costs don't. That's why profit swings harder than revenue.

In the example, a 20% drop in sales cuts net profit from $14,400 to $7,680, nearly half. A 20% rise lifts it to $21,120. If last period's numbers go in the prior fields, you'll also see revenue growth, the change in profit and the margin change in percentage points.

When to double-check the result

Profit isn't cash. Unpaid customer invoices, unsold stock, loan repayments and owner withdrawals all move cash differently from profit. Check your cash flow before deciding what you can spend.

The tax rate is a rough estimate. Real income tax depends on your country, business type, deductions and past losses. For accounts or a tax return, use your bookkeeping records and an accountant.

Sources

These references explain the income statement order, gross profit and break-even analysis used on this page.

SEC: beginner's guide to financial statementsHow revenue, gross profit, operating profit and net income fit together.IRS Publication 334Gross receipts, returns, cost of goods sold and net profit for US small businesses.SBA: break-even pointThe Small Business Administration's break-even formula for sales.OpenStax: break-even and target profitBreak-even revenue and turning an after-tax target into pre-tax profit.OpenStax: margin of safetyHow far sales can fall before a business hits break-even.

FAQ

What's the difference between gross profit and net profit?

Gross profit is revenue minus the direct cost of what you sold. Net profit takes off everything else too: overheads, depreciation, interest and tax. Net profit is always the smaller of the two when those costs exist.

How do I calculate net profit margin?

Divide net profit by net revenue and multiply by 100. $14,400 of net profit on $95,000 of revenue is a 15.16% net profit margin.

What is EBITDA?

It stands for earnings before interest, taxes, depreciation and amortization. Here it's gross profit minus variable and fixed operating expenses. It isn't cash flow and it isn't the bottom line.

Do refunds count as an expense?

They're better treated as a reduction of revenue. Enter them in the returns field so your margins use the sales you kept, not sales that were later refunded.

Are loan repayments an expense?

Only the interest is. The part that pays back the loan itself reduces debt, not profit. Enter interest in its own field and leave principal repayments out.

What if my business made a loss?

The calculator shows the loss and charges no tax on it. It doesn't estimate tax refunds or carryforwards, since those depend on local tax rules.

How much revenue do I need to break even?

Divide your fixed burden by the share of each sale left after variable costs. In the example, $24,000 divided by 44.21% is about $54,286 of net revenue.