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Profit and Loss Calculator

Build a simple profit and loss statement. Calculate gross profit, operating income, EBITDA, and net profit with margin percentages.

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Total income from sales

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Direct costs: materials, manufacturing, shipping

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Rent, salaries, marketing, insurance, utilities

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Investment returns, asset sales (optional)

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Cost of loans and debt financing (optional)

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Estimated income tax rate

Enter your revenue and expenses, then click Calculate to generate your P&L.

How Profit and Loss Statements Work

What is a P&L Statement?

A Profit and Loss (P&L) statement, also known as an income statement, is a financial report that summarizes revenue, costs, and expenses over a period. It answers the fundamental question: is the business making money?

Key Line Items

  • Revenue: Total income from sales of goods or services
  • Cost of Goods Sold (COGS): Direct costs to produce or deliver what you sell (materials, manufacturing labor, shipping)
  • Gross Profit: Revenue minus COGS — shows production efficiency
  • Operating Expenses: Indirect costs like rent, salaries, marketing, insurance, utilities
  • Operating Income: Gross profit minus operating expenses — shows core business profitability
  • Other Income: Revenue from non-core activities (investment returns, asset sales)
  • Interest Expense: Cost of debt financing
  • Taxes: Income tax based on pre-tax profit

Understanding Margins

Margins express each profit level as a percentage of revenue:

  • Gross Margin = Gross Profit ÷ Revenue (measures production efficiency)
  • Operating Margin = Operating Income ÷ Revenue (measures operational efficiency)
  • Net Margin = Net Profit ÷ Revenue (measures overall profitability)

Higher margins mean more of each revenue dollar becomes profit. Tracking margins over time reveals trends in efficiency and cost control.

EBITDA

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) approximates operating cash flow. In this calculator, EBITDA equals Operating Income plus any depreciation and amortization expenses included in your operating costs. It’s a key metric investors use to value businesses.

Frequently asked questions

A profit and loss statement (P&L), also called an income statement, summarizes your revenue, costs, and expenses during a specific period. It shows whether your business made a profit or loss. The P&L is one of the three core financial statements, along with the balance sheet and cash flow statement.

Gross profit is revenue minus the direct cost of goods sold (COGS) — it shows how efficiently you produce or source your products. Net profit is what remains after ALL expenses including operating costs, interest, and taxes. A company can have healthy gross profit but low net profit if operating expenses are high.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures operating performance without the impact of financing decisions, tax environments, or accounting methods. Investors and analysts use EBITDA to compare profitability across companies and industries because it strips out variables that differ between businesses.

Profit margins vary widely by industry. Net profit margins of 10-20% are generally considered good. Software companies often see 20-30%+. Retail and food service may operate on 2-5%. Gross margins above 50% are strong for most industries. Compare your margins to industry benchmarks rather than absolute numbers.

Read a P&L top to bottom: start with total revenue, subtract COGS to get gross profit, subtract operating expenses to get operating income, account for other income/expenses and interest, then subtract taxes to arrive at net profit. Each line shows where money goes. Margins (gross, operating, net) show percentages at each stage.

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