Gross, operating and net profit — interactive income statement and break-even point
Four tools in one: profit per unit, profit for a period, a simplified income statement with a visual margin cascade, and a break-even point with a volume simulator.
Enter a product's cost and selling price to calculate profit, margin and markup per unit.
Enter total revenue and cost of goods sold to calculate gross profit for the month or period.
Fill in the fields below to generate the complete income statement with gross, operating and net profit in real time.
Fill in gross revenue to generate the income statement.
Find out how many units (or how much revenue) your business needs to cover all fixed costs and start turning a profit.
Fill in fixed costs and contribution margin to calculate the break-even point.
The word "profit" is used generically in everyday language, but accounting distinguishes three levels, each with a different purpose. Knowing each one is essential for making sound business decisions.
Net Revenue − COGS
Gross Profit − Op. Expenses
Op. Profit ± Financial Result − Tax
Gross profit measures how much of revenue is left after paying only for the products sold. A high gross profit indicates good pricing and/or good control over purchasing costs. It's the starting point: if gross profit isn't enough, no amount of cutting operating expenses will save the result.
Operating profit deducts the fixed costs of running the business. It answers the question: "Is the company's core activity profitable, regardless of how it's financed?" A positive operating profit indicates a healthy business model — even if debt is weighing on the financial result.
Net profit is the final result after every deduction — including taxes on profit. It's the number that feeds owners' equity and the business's ability to reinvest. A company can have high gross profit and low — or even negative — net profit due to uncontrolled expenses or heavy debt.
| Income Statement | Value | % of Revenue |
|---|---|---|
| Gross Sales Revenue | $100,000 | — |
| (−) Sales taxes (7%) | $(7,000) | — |
| = Net Revenue | $93,000 | 100% |
| (−) COGS | $(51,150) | −55% |
| = Gross Profit | $41,850 | 45% |
| (−) Operating expenses | $(28,000) | −30.1% |
| = Operating Profit | $13,850 | 14.9% |
| (−) Financial expenses | $(1,200) | −1.3% |
| (−) Income tax (15%) | $(1,898) | −2% |
| = Net Profit | $10,752 | 11.6% |
The break-even point (BEP) is the sales volume at which total revenue equals all costs — no profit, no loss. Below the BEP, the business runs in the red. Above it, it starts generating profit.
Store with $6,000/month in fixed costs. Product sold for $80, with a $48 variable cost.
Starting with the 189th unit sold in the month, every sale generates $32 of net profit for the business.