Profit Calculator

Calculate gross profit, operating profit (EBIT), and net income with margin percentages across every tier of your corporate income statement.

Income Statement Inputs

Live calculation
Business Model Presets

Direct production, wholesale inventory acquisition, direct labor

Salaries, rent, software licenses, advertising, utility bills

Corporate tax obligations, debt interest, one-off write-downs

Net Profit (Bottom Line)
$30,000(30.00% Margin)
Gross Profit60.00%
$60,000

Revenue − Direct COGS

Operating Profit35.00%
$35,000

Gross Profit − OpEx

Net Income30.00%
$30,000

EBIT − Taxes/Interest

Revenue Allocation Breakdown

COGS vs. OpEx vs. Taxes vs. Net Profit
$100,000Gross Revenue
Cost of Goods Sold (COGS)

$40,000

40% • Direct Costs

Operating Expenses (OpEx)

$25,000

25% • Overhead

Other (Taxes/Interest)

$5,000

5% • Taxes/Other

Net Profit Retained

$30,000

30% • Bottom Line

Multi-Tier Income Statement Profit Mechanics

Corporate profitability is evaluated in cascading tiers down the income statement (P&L). Each distinct tier isolates a fundamental dimension of business operations: production pricing efficiency (Gross Profit), overhead operational discipline (Operating Profit / EBIT), and comprehensive tax-adjusted net yield (Net Income).

1. Gross Profit & Operating Profit (EBIT) Formulas
Gross Margin (%) =
Revenue - COGSRevenue
× 100
|
Operating Margin (%) =
Gross Profit - OpExRevenue
× 100
2. Net Profit Bottom-Line Margin Equation
Net Margin (%)=
Operating Profit - Taxes & InterestRevenue
× 100
Step-by-Step Calculation Breakdown ($100,000 Revenue Benchmark)
Step 1: Compute Tier 1 — Gross Profit & Margin
• Gross Profit = $100,000 (Revenue) - $40,000 (COGS) = $60,000 Gross Profit
• Gross Margin = ($60,000 ÷ $100,000) × 100 = 60.00% Gross Margin
Step 2: Compute Tier 2 — Operating Profit (EBIT) & Margin
• Operating Profit = $60,000 (Gross Profit) - $25,000 (OpEx) = $35,000 EBIT
• Operating Margin = ($35,000 ÷ $100,000) × 100 = 35.00% Operating Margin
Step 3: Compute Tier 3 — Net Profit & Bottom-Line Margin
• Net Income = $35,000 (EBIT) - $5,000 (Taxes & Interest) = $30,000 Net Profit
• Net Margin = ($30,000 ÷ $100,000) × 100 = 30.00% Net Profit Margin

Industry Profitability & Margin Standards Table

Industry / Business ModelAvg Gross MarginAvg Operating MarginAvg Net MarginCost Structure Profile
SaaS / Enterprise Software75% – 85%20% – 35%18% – 28%Negligible unit COGS, heavy R&D and customer acquisition OpEx.
E-Commerce & DTC Brands45% – 60%10% – 18%8% – 14%Significant advertising CAC and 3PL fulfillment costs.
Full-Service Restaurant60% – 70%8% – 14%4% – 9%High prime costs (food waste COGS + heavy kitchen payroll OpEx).
Consulting & Professional Services55% – 75%20% – 30%15% – 25%Human capital intensive with low physical inventory exposure.
Grocery Supermarket Retail22% – 28%2% – 4%1% – 3%Ultra high inventory velocity compensating for razor-thin margins.

Frequently Asked Questions

What is the structural difference between Gross, Operating, and Net profit?
Gross Profit measures core production profitability after deducting Cost of Goods Sold (COGS). Operating Profit (EBIT) deducts operational overhead like rent, payroll, and advertising. Net Profit is the ultimate bottom line after interest, depreciation, and corporate income taxes.
What expenses belong in COGS vs. Operating Expenses (OpEx)?
COGS consists of direct production expenses: raw materials, factory direct labor, and inventory freight. Operating Expenses include indirect overhead necessary to run the organization: executive salaries, office rent, software tools, sales commissions, and legal fees.
What is a healthy Net Profit Margin across different industries?
Net profit margins vary dramatically by business model: SaaS/Software (20%–35%), Professional Services (15%–25%), Commercial Construction (3%–6%), Brick-and-Mortar Retail (3%–7%), Supermarket Groceries (1%–2%).
How do you calculate Earnings Before Interest and Taxes (EBIT)?
EBIT is equivalent to Operating Profit: EBIT = Gross Profit - Operating Expenses (or Total Revenue - COGS - OpEx). It isolates core business operating efficiency from financing structure and tax jurisdiction.

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