Net Profit Calculator

Net profit is what remains after COGS, operating expenses, and other costs are deducted from revenue. Net margin shows net profit as a percentage of revenue.

This calculator models operating-level expenses in one stack. Tax, interest, and exceptional items may still move the statutory bottom line — treat this as a management view for planning.

Net profit is what remains after COGS, operating expenses, and other expenses in this model — closest to bottom-line operations before tax in many SME views.

Net margin = net profit ÷ revenue. It absorbs all modelled expense layers.

Trace from gross profit calculator and operating margin calculator to see where profit erodes.

Revenue £100,000, COGS £40,000, OpEx £25,000, other expenses £5,000. Total expenses £70,000.

Gross profit = £60,000. Net profit = £30,000. Net margin = 30%.

If OpEx rises by £5,000 without revenue growth, net profit falls to £25,000 and margin to 25%. Overhead control is often the difference between flat and growing bottom line.

Revenue £500,000, COGS £200,000, operating £180,000, other £20,000 → net £100,000, net margin 20%.

A £30,000 opex overshoot without revenue growth cuts net to £70,000 — margin 14%.

Tax is not always in other expenses — add tax line or adjust for statutory net income separately.

Compare gross profit, operating profit, and net profit calculators on the same inputs to see where margin is lost — in product cost, running the business, or other lines.

A business can grow revenue while net margin shrinks if costs scale faster than sales.

Net profit = revenue − COGS − operating expenses − other expenses.

Net margin % = net profit ÷ revenue × 100.

Align period and accrual basis with your accounts.

Net margin is the line owners, lenders, and investors watch when deciding dividends, hiring, or covenant compliance. A 2-point drop from 20% to 18% on £500,000 revenue is £10,000 less net profit — material for SMEs even when revenue grew.

Run net profit scenarios before signing leases, hiring managers, or taking on debt service — fixed step costs hit net after they flow through gross and operating layers.

Compare net outcomes at actual volume versus break-even volume — contribution and break-even tools show required sales; this page shows whether you cleared fixed and variable costs profitably.

Revenue growth with stable margin percentage raises absolute net faster than discounting for volume alone.

Gross margin improvement flows straight through if opex is held — supplier deals and pricing discipline belong here first.

Opex control without cutting sales capacity — trim discretionary spend before pipeline-generating roles.

Finance costs — refinance or pay down expensive debt when net margin cannot support interest burden.

Tax planning with qualified advisers — structure and timing affect net after statutory adjustments not always modelled here.

Net profit of £100,000 does not mean £100,000 available for dividends — reserve for corporation tax, working capital, capex, and debt service first. Many SMEs target a 60–70% payout ratio of sustainable net, not headline net.

Accrual net profit can look strong while receivables stretch — pair this calculator with cash-flow review before increasing owner draw or hiring.

Trace margin erosion top-down: gross profit calculator → operating margin calculator → net — each step shows where the last £10,000 of profit disappeared.

Treating net margin as the same as cash generation — depreciation, inventory builds, and VAT timing separate them.

Omitting director loan interest or one-off asset sales from “other expenses” then comparing net to operational KPIs — label adjusted net for internal use.

Benchmarking net margin to a public company without adjusting for scale, debt, and tax structure — useful directionally, not as a hard target.

Present net profit with one paragraph on cash vs accrual timing — lenders and owners care about both.

Before increasing draw or dividend, reserve tax, capex, and buffer — net profit is not fully distributable.

When net falls, walk the stack with operating margin calculator to locate opex vs gross pressure.

Net profit includes non-cash items like depreciation — a £80,000 net profit year with £50,000 capex and £30,000 working-capital build may leave little free cash despite strong accounts.

Tax timing, accruals, and delayed customer payments mean net margin can look healthy while the bank account is tight — pair this calculator with a simple cash-flow forecast for decisions under 90 days.

One-off gains (asset sales, grants) inflate net profit without repeating — strip them before setting dividend or bonus pools tied to performance.

Compare net margin trends to profit margin calculator on the same revenue base — if net lags gross consistently, interest, tax, or below-the-line costs deserve a dedicated review.

This page should target net profit calculator, net margin calculator, business profit after expenses, and revenue minus expenses searches.

It calculates net profit, total expenses, gross profit, and net margin from revenue, COGS, operating expenses, and other expenses. It does not prepare statutory accounts, separate tax rules, depreciation, cash flow, owner drawings, or balance-sheet movements.