Profit Calculator — Gross, Net Profit & Break-Even
Calculate gross, operating, pre-tax, and net profit, build a common-size P&L, find break-even and target sales, and compare reporting periods.
Business profit and loss estimate
Build a planning P&L from net sales through gross, operating, pre-tax, and estimated net profit.
Break-even and target profit planner
Separate fixed costs from per-unit variable cost, then test expected sales and a target profit.
Compare two reporting periods
Separate revenue growth from margin improvement and see how much additional revenue reaches net profit.
Earlier period
Later period
Profit waterfall
Calculation breakdown
Common-size profit and loss statement
| Line item | Amount | % of revenue |
|---|
Profit calculator formulas
Net revenue equals gross revenue minus returns and discounts. Gross profit equals net revenue minus cost of goods sold. Operating profit subtracts payroll and other operating expenses; this planner then adds other income, subtracts interest, and estimates tax on positive pre-tax profit.
Gross, operating, and net margin
Each margin divides its profit level by net revenue. Gross margin focuses on direct product cost, operating margin includes day-to-day operating expenses, and net margin includes the additional income, interest, and estimated tax entered here.
Break-even calculator
Break-even units equal fixed costs divided by contribution per unit. Contribution per unit is selling price minus variable cost. Break-even sales dollars equal fixed costs divided by the contribution-margin ratio.
Target profit and safety margin
Target units add desired profit to fixed costs before dividing by contribution per unit. Margin of safety compares expected units with break-even units; a negative value warns that the sales plan remains below break-even.
Compare profit between periods
Revenue growth can coexist with falling profit. Compare mode shows gross and net margin changes in percentage points and incremental margin: change in net profit divided by change in revenue when revenue changed.
Losses and planning assumptions
Negative gross, operating, or net profit is preserved rather than replaced with zero. The tax field is a simple planning estimate and does not model deductions, tax brackets, credits, loss carryforwards, or entity-specific rules.
Profit and break-even formulas
| Metric | Formula |
|---|---|
| Gross profit | Net revenue - cost of goods sold |
| Operating profit | Gross profit - operating expenses |
| Net profit | Pre-tax profit - estimated tax |
| Profit margin | Profit / net revenue x 100 |
| Break-even units | Fixed costs / contribution per unit |
| Target units | (Fixed costs + target profit) / contribution per unit |
Frequently asked questions
Is gross profit the same as net profit?
No. Gross profit subtracts cost of goods sold from net revenue. Net profit also reflects operating expenses and the other income, interest, and estimated tax entered in this planner.
What if a service business has no cost of goods sold?
Enter zero if direct merchandise or service delivery cost is not separated from operating expenses. Keep expense classification consistent when comparing periods.
Why is break-even unavailable when variable cost exceeds price?
Each additional sale would have zero or negative contribution, so unit volume alone cannot recover fixed costs. Raise price or reduce variable cost before a finite break-even point exists.
Method and sources
IRS Publication 334 describes net receipts, cost of goods sold, and gross profit before business expenses. The U.S. Small Business Administration break-even guide documents break-even units and contribution-margin formulas. Results are planning estimates, not accounting, tax, or investment advice.
