Net Profit Calculator
The Number That Survives Every Expense
Revenue tells you what came in the door. Gross profit tells you what's left after the product itself is paid for. Net profit is the figure that has survived everything — cost of goods sold, payroll, rent, marketing, interest, taxes, all of it. It's the bottom line in the most literal sense, and it's what actually determines whether a business generated a return for its owners in a given period.
The Formula
Net Profit = Total Revenue − Total Expenses
When revenue is nonzero, the calculator also reports Net Profit Margin = (Net Profit ÷ Revenue) × 100, which expresses net profit as a share of every revenue dollar.
A Worked Example
| Item | Amount |
|---|---|
| Total Revenue | $500,000 |
| Total Expenses | $430,000 |
| Net Profit | $70,000 |
| Net Profit Margin | 14% |
Where This Calculation Matters
- Owner distributions — for small businesses, net profit is the practical ceiling on what can be safely drawn out without weakening the balance sheet.
- Loan applications — lenders review historical net profit trends to judge whether a business can service new debt on top of its existing obligations.
- Break-even tracking — comparing net profit across consecutive periods shows whether cost-cutting or pricing changes are actually reaching the bottom line, not just gross profit.
- Tax planning — net profit before tax is the starting point most small business tax estimates work from.
Note: "Total expenses" here means every expense for the period — COGS, operating expenses, interest, and taxes combined — not just operating costs. Leaving out any category will overstate net profit.
How to Use This Calculator
- Enter Total Revenue for the period.
- Enter Total Expenses for the same period, including COGS, operating costs, interest, and taxes.
- Select Calculate to see Net Profit in dollars along with Net Profit Margin.
Related Calculations
Start further up the income statement with the Gross Profit Calculator, or check leverage exposure with the Debt Ratio Calculator.