How to Calculate Profit
What is Profit?
A profit calculator computes revenue, cost, gross profit, and net profit for a business or product. Understanding profit at different levels (gross, operating, net) reveals where value is created and lost in a business.
Step-by-Step Guide
- 1Gross profit = Revenue − Cost of Goods Sold (COGS)
- 2Operating profit = Gross profit − Operating expenses
- 3Net profit = Operating profit − Interest − Taxes
- 4Profit margin % = (Profit / Revenue) × 100
Worked Examples
Input
Revenue $200k, COGS $120k, expenses $40k
Result
Gross $80k (40%), Net $40k (20%)
Input
Sell 100 units at $50, costs $25/unit, $1,000 fixed costs
Result
Net profit $1,500
(50−25)×100 − 1000
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