Net Profit Calculator
Calculate your business net profit and net profit margin after all expenses.
Direct costs to produce goods/services
Salaries, rent, utilities, marketing, etc.
Interest, taxes, depreciation, etc.
What is net profit?
Net profit is the total revenue minus all expenses (COGS, operating expenses, taxes, interest, etc.). It represents the actual profit remaining after paying all costs. Also called "bottom line" or "net income," it shows the true profitability of a business.
What is the difference between gross profit and net profit?
Gross profit is revenue minus only the cost of goods sold (COGS). Net profit is revenue minus ALL expenses including COGS, operating expenses, interest, taxes, and depreciation. Gross profit shows production efficiency, while net profit shows overall business profitability.
What is a good net profit margin?
Net profit margin varies by industry. Software/SaaS: 15-25%, Banking: 20-30%, Retail: 2-5%, Restaurants: 3-6%, Manufacturing: 5-10%, Consulting: 10-20%. Generally, 10%+ is considered healthy, 15%+ is good, and 20%+ is excellent. Compare to industry benchmarks for accurate assessment.
How can I improve my net profit margin?
Increase net profit margin by: 1) Raising prices without losing customers, 2) Reducing COGS through better supplier deals or efficiency, 3) Cutting operating expenses (marketing, overhead), 4) Improving sales mix (sell more high-margin products), 5) Increasing revenue without proportional cost increases. Focus on controllable expenses first.
What expenses are included in net profit calculation?
All expenses: Cost of Goods Sold (materials, direct labor), Operating Expenses (salaries, rent, utilities, marketing, insurance, office supplies), Interest (loan payments), Taxes (income tax), Depreciation (asset value decline), and any other business costs. Net profit = Revenue - All Expenses.
Can net profit be negative?
Yes, negative net profit means a net loss - the business spent more than it earned. This is common for startups, during expansion, or economic downturns. Occasional losses may be acceptable, but consistent negative net profit indicates the business is unsustainable and burning through cash reserves.