This calculator helps you determine your true net profit after accounting for cost of goods sold and operating expenses. It shows how much money your business actually keeps after all costs are deducted.
Many businesses focus on revenue, but revenue alone does not determine success. Profit is what matters. A business generating £10,000 in sales can still lose money if costs are too high.
This tool helps you understand both your net profit and profit margin, giving you a clear picture of financial performance and business health.
The result shows your net profit (the amount left after all costs) and your net margin (the percentage of revenue that becomes profit).
A high margin means your business is efficient and profitable. A low or negative margin indicates that costs are too high or pricing is too low.
Net Profit = Revenue − COGS − Expenses
Net Margin = (Net Profit ÷ Revenue) × 100
This ensures all major cost components are included when evaluating business performance.
Net profit is the most important metric in business. It determines whether your business is sustainable.
For ecommerce businesses, this becomes even more critical when factoring in advertising costs, platform fees, shipping, and VAT. A product that looks profitable at a gross level may be loss-making after all costs are included.
Improving profit can come from increasing prices, reducing costs, or improving conversion rates. Even small improvements in margin can significantly increase total profit.
Example 1:
Revenue £10,000 → Profit £3,000 → 30% margin
Example 2:
Revenue £2,500 → Profit £200 → 8% margin
Example 3:
Low margin businesses require significantly higher revenue to scale profit.
Revenue minus all costs.
Typically 10–20% or higher.
It determines business sustainability.