Calculate net income, gross profit, operating income, and profit margins. Analyze multi-year trends and understand what the bottom line really tells you about a company's profitability.
Enter revenue and expenses to calculate gross profit, operating income, pre-tax income, and net income with all profit margins.
Net Income = Revenue − COGS − Operating Expenses − Interest − Taxes
Enter financial figures to get all three profit margins at once.
Visual breakdown from revenue to net income — see where the money goes at each step. Uses values from the Net Income Calculator above.
Enter 3 to 5 years of net income data to calculate the compound annual growth rate (CAGR) and visualize the trend.
Enter net income for each year. Leave Year 4 and Year 5 blank if you only have 3 years.
Average net profit margins vary dramatically across industries. Use this benchmark to compare your company's profitability.
Net income — also called net profit, net earnings, or simply the bottom line — is the total amount of profit a company earns after deducting all expenses from revenue. It sits at the very bottom of the income statement, which is why it's called the bottom line.
When a company reports "earnings" in its quarterly results, it's referring to net income. When analysts talk about a company's "profit," they usually mean net income. And when you see earnings per share (EPS), that's just net income divided by the number of shares outstanding.
The calculation flows through several intermediate profit lines, each telling you something different:
Gross Profit = Revenue − Cost of Goods Sold. This shows how efficiently a company produces its products or delivers its services.
Operating Income = Gross Profit − Operating Expenses (SG&A, R&D, etc.). This shows the profitability of core business operations.
Pre-Tax Income = Operating Income − Interest Expense. This shows profit before the government takes its share.
Net Income = Pre-Tax Income − Taxes. The final bottom line after everything is accounted for.
Each profit metric strips away different layers of expenses. Here's how they compare:
| Metric | Includes COGS | Includes OpEx | Includes Interest | Includes Taxes | Includes D&A | Best For |
|---|---|---|---|---|---|---|
| Gross Profit | ✓ Deducted | ✗ | ✗ | ✗ | ✗ | Production efficiency |
| Operating Income | ✓ Deducted | ✓ Deducted | ✗ | ✗ | ✓ Deducted | Core operations |
| EBITDA | ✓ Deducted | ✓ Deducted | ✗ | ✗ | ✗ Added Back | Cross-company comparison |
| Net Income | ✓ Deducted | ✓ Deducted | ✓ Deducted | ✓ Deducted | ✓ Deducted | True bottom-line profit |
For a deep dive into EBITDA and how it compares to net income in valuation, check our EBITDA Calculator.
Net income is the most cited profitability metric, but it has real limitations that every investor should understand. Here are the three biggest traps: