Gross profit is revenue minus the direct cost of goods sold (COGS), reflecting how efficiently you produce or source what you sell. Net profit deducts all operating expenses, taxes, and interest from gross profit, giving the true bottom-line income of the business. Tracking both helps identify whether problems stem from production costs or overheads.

Profit percentage is calculated as (Profit / Cost Price) × 100. For example, if you bought an item for ₹500 and sold it for ₹600, your profit is ₹100 and the profit percentage is (100 / 500) × 100 = 20%. The calculator handles this formula automatically once you enter cost and selling price.

Profit margin (also called profit margin %) expresses profit as a proportion of the selling price: (Profit / Selling Price) × 100. Profit percentage expresses profit relative to the cost price. Both measure profitability but from different baselines, so they will give different numbers for the same transaction.

A loss occurs when total costs exceed total revenue — i.e., Cost Price > Selling Price. In a P&L statement a loss is shown as a negative figure. The loss percentage is calculated as (Loss / Cost Price) × 100. The calculator flags a loss scenario automatically when the selling price you enter is lower than the cost price.

This calculator focuses on the core profit and loss calculation (revenue vs. cost). If your selling price includes GST, you should use the GST-exclusive selling price when entering figures, so that tax is not mistaken for profit. For combined GST and profit analysis, use a dedicated GST calculator alongside this tool.

• EBIT (Earnings Before Interest & Taxes): Measures a company's core operating profitability by subtracting COGS and operating expenses from revenue. It evaluates operating health without interest expenses or tax environments.
• EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization): Measures operating cash generation potential by adding non-cash expenses (depreciation of equipment and amortization of intangibles) back to EBIT. EBITDA is always higher than EBIT.

Depreciation is an accounting expense that reflects the asset's wear and tear over time. It provides a tax deduction without cash outflow, thus affecting taxable income. Non-cash expenses impact tax liability and profitability calculation.

• Fixed Costs: Overhead expenses that remain constant regardless of production or sales volume (e.g., office rent, permanent employee salaries, insurance, property taxes).
• Variable Costs: Direct costs that increase or decrease in direct proportion to production volume (e.g., raw materials, product packaging, sales commissions, shipping costs). Understanding the distinction between fixed and variable costs is essential for calculating your business break-even point and setting profitable unit pricing.

Varies by industry. Retail: 2-5%, Manufacturing: 5-20%, Software: 20-40%, Professional Services: 15-25%. Compare your margins with industry benchmarks.

When total expenses exceed revenue, you have a loss. This happens in early-stage businesses, during market downturns, or due to poor cost management. Analyze which expenses are too high.

No. P&L is an accounting statement for management analysis. Tax return adjusts P&L for specific tax rules (disallowed expenses, timing differences, exemptions).

Monthly for operational management, quarterly for analysis, and annually for statutory and tax purposes. Quarterly is a good balance for businesses.

Burn rate is the monthly loss/negative cash flow, particularly common in startups. It shows how quickly a company is spending cash. If monthly expenses are ₹10L but revenue is ₹2L, burn rate is ₹8L/month.