Net Income Calculator

Net Income, also called net profit or the bottom line, is the final measure of a business's profitability after all costs have been deducted from revenue. It appears at the bottom of an income statement and represents what a company truly keeps after paying for goods sold, operating expenses, interest on debt, and taxes. This calculator walks you through each deduction step — from gross profit to operating income to final net income — and expresses the result as both a dollar figure and a net profit margin percentage. It is the definitive measure investors, lenders, and owners use to assess whether a business is generating real economic value. Unlike gross profit, which only strips out direct production costs, net income accounts for the full cost of running the business, making it a far more complete picture of financial performance. Monitoring net income trends over multiple periods reveals whether a business is scaling efficiently or whether rising costs are eroding gains in revenue.

The calculator works through a standard income statement waterfall. First, it subtracts Cost of Goods Sold (COGS) from Total Revenue to arrive at Gross Profit — what you keep before overhead costs. Next, Operating Expenses (rent, staff, software, marketing, etc.) are deducted to reveal Operating Income, also called Earnings Before Interest and Taxes (EBIT). Interest expense on loans and credit lines is then subtracted to produce Earnings Before Tax (EBT). Finally, the tax figure is deducted to produce the bottom-line Net Income. This final figure is then divided by Total Revenue and multiplied by 100 to calculate the Net Profit Margin percentage. A negative net income indicates a net loss for the period. Service businesses with no physical goods should enter zero for COGS.