Income
Cost of sales
Operating expenses
This calculator provides a simplified business estimate. It does not replace formal accounts, tax calculations or professional accounting advice.
What is a Profit & Loss statement?
A Profit & Loss statement, often called a P&L or income statement, summarises income and expenses over a period and shows whether a business made a profit or a loss.
Gross Profit = Total Income − Cost of Sales
Operating Profit = Gross Profit − Operating Expenses
Net Profit Margin (%) = Net Profit ÷ Total Income × 100
Worked example
If total income is £100,000, cost of sales is £50,000 and operating expenses are £30,000, the business has a gross profit of £50,000 and an operating profit of £20,000.
Frequently asked questions
Is this suitable for sole traders and small businesses?
Yes, for a simple estimate. Formal accounts may use different classifications and can include depreciation, interest, tax and other items not included here.
What is included in cost of sales?
Usually the direct costs of producing or purchasing the goods or services sold, such as stock, materials and direct labour.
Does this calculate corporation tax or income tax?
No. Tax depends on the business structure, jurisdiction and individual circumstances and is not included in this calculator.