Net Profit Calculator
Calculate net profit and net profit margin percentage from total revenue and total expenses.
$
$
Cost of goods sold, operating expenses, interest, and taxes combined.
Net Profit
$28,000.00
Net Profit Margin
28.00%
How Net Profit and Margin Are Calculated
Net profit is what remains after subtracting all expenses — cost of goods sold, operating expenses, interest, and taxes — from total revenue. Dividing net profit by total revenue gives the net profit margin, a percentage that shows how much of every dollar in sales actually turns into profit.
Net Profit Margin = (Net Profit / Total Revenue) × 100
Example
A business with $100,000 in total revenue and $72,000 in total expenses (covering cost of goods, operating costs, interest, and taxes) has a net profit of $28,000 — a 28% net profit margin. That means 28 cents of every revenue dollar is retained as profit.
Common Use Cases
- Checking overall business profitability after all costs are accounted for.
- Comparing profit margins across different periods, products, or business lines.
- Benchmarking your margin against industry averages.
- Tracking whether cost-cutting or pricing changes are improving profitability.
FAQs
What's the difference between net profit and gross profit?
Gross profit only subtracts the cost of goods sold (COGS) from revenue, ignoring operating expenses, interest, and taxes. Net profit subtracts all expenses, giving the true bottom-line result of the business.
What counts as a total expense here?
Include everything that reduces your bottom line: cost of goods sold, rent, salaries, marketing, interest on debt, and taxes. Leaving out any major cost category will overstate your real net profit and margin.
What is a good net profit margin?
It varies significantly by industry — software and services businesses often see margins above 15-20%, while retail and grocery businesses commonly operate on margins of just 2-5%. Compare your margin against similar businesses in your industry rather than a single universal target.