Long Term Capital Gains Tax Rate Calculator

Net Profit Calculator

This calculator helps you estimate the net profit of a business venture or a single sale. Net profit is what remains after all expenses have been deducted from revenue. It's a crucial metric for understanding profitability.

Understanding Net Profit

Net profit, often referred to as the "bottom line," represents the actual profit a company or venture earns after accounting for all costs and expenses. It's calculated using the following formula:

Net Profit = Total Revenue – Cost of Goods Sold (COGS) – Operating Expenses – Taxes

• Total Revenue: This is the total amount of money generated from sales of goods or services.
• Cost of Goods Sold (COGS): These are the direct costs attributable to the production or purchase of the goods sold by a company.
• Operating Expenses: These are the costs incurred in the normal course of business operations, such as rent, salaries, marketing, utilities, etc.
• Taxes: This includes all income taxes levied on the business's profits.

A positive net profit indicates that the business is profitable, while a negative net profit (a net loss) means expenses exceeded revenue.

Example Calculation:

Let's say a small online store had the following figures for a month:

• Total Revenue: $10,000
• Cost of Goods Sold: $4,000
• Operating Expenses (website hosting, marketing, shipping supplies): $2,000
• Taxes: $1,000

Using the net profit formula:

Net Profit = $10,000 – $4,000 – $2,000 – $1,000 = $3,000

In this example, the store's net profit for the month is $3,000.