Profit & Loss
Statement Calculator
Build a complete P&L statement for your business in seconds. Enter your revenue, cost of goods, and operating expenses to see gross profit, operating profit, EBITDA and net profit — completely free.
Enter Your Figures
Fill in your business income and expenses below. Add multiple line items using the + buttons.
Enter your revenue and expenses, then hit Generate P&L Statement.
Key P&L metrics explained
Understanding the key lines in a profit and loss statement and what the numbers mean for your business.
| P&L Line | Formula | What It Tells You | Healthy Range |
|---|---|---|---|
| Gross Profit | Revenue − COGS | Profit before operating expenses | Depends on industry |
| Gross Profit Margin | Gross Profit ÷ Revenue × 100 | Efficiency of production/delivery | 40–60% (services), 20–40% (product) |
| Operating Profit (EBIT) | Gross Profit − OpEx | Profit from core business operations | 10–20% is solid |
| EBITDA | EBIT + D&A | Cash operating performance proxy | Widely used for valuation |
| Net Profit | EBIT − Interest − Tax | Final profit after all deductions | 5–15% is healthy |
| Net Profit Margin | Net Profit ÷ Revenue × 100 | Overall business profitability | Higher = more efficient |
| Break-even Point | Fixed Costs ÷ Gross Margin % | Revenue needed to cover all costs | Lower is better |
COGS = Cost of Goods Sold. EBIT = Earnings Before Interest & Tax. EBITDA = Earnings Before Interest, Tax, Depreciation & Amortisation. D&A = Depreciation & Amortisation.
| Industry | Avg Gross Margin | Avg Net Margin | Notes |
|---|---|---|---|
| Software / SaaS | 70–85% | 15–30% | High margin |
| Professional Services | 50–70% | 10–25% | Consulting, legal, accounting |
| Retail (general) | 25–45% | 2–8% | Volume dependent |
| Food & Beverage | 60–70% | 3–9% | High labour & waste costs |
| Construction | 15–30% | 2–8% | Low margin, high risk |
| Manufacturing | 20–40% | 5–15% | Varies widely by product |
| E-commerce | 30–50% | 3–10% | High marketing spend |
| Healthcare / Medical | 40–60% | 8–20% | — |
These are broad averages. Individual businesses within each sector can vary significantly. Compare your margins against direct competitors, not just industry averages.
| P&L Format | Best For | Key Feature | Notes |
|---|---|---|---|
| Single-step P&L | Small / sole trader businesses | All income minus all expenses = net income | Simple |
| Multi-step P&L | SMEs and limited companies | Shows gross profit, operating profit, then net | Most informative |
| Contribution margin P&L | Product businesses, manufacturing | Separates variable and fixed costs | Better for break-even analysis |
| EBITDA-focused | Investment & M&A reporting | Adjusts for D&A and financing structure | Used for business valuation |
| Management accounts | Internal monthly reporting | Includes budget vs actual comparison | Not statutory |
UK limited companies must file statutory accounts with Companies House — these follow FRS 102 or FRS 105 format. This calculator produces a management accounts-style P&L for internal use.
Understanding your P&L
Gross Profit
Revenue minus the direct cost of producing or delivering your goods/services (COGS). A healthy gross margin means you have enough left over to cover your operating costs and still profit.
Operating Profit (EBIT)
Gross profit minus all operating expenses (rent, salaries, marketing etc.). This shows how profitably your core business runs — before the effects of how you’ve financed it or your tax position.
EBITDA
Operating profit added back with depreciation and amortisation. It’s a proxy for cash generation from operations and is widely used to compare businesses and value companies for sale or investment.
Net Profit
The bottom line — what’s left after all costs, interest and tax. This is the true measure of profitability and what can be paid as dividends, reinvested, or retained as cash in the business.
Profit Margins
Expressed as a percentage of revenue, margins tell you how efficient your business is. A business with £1m revenue and 20% net margin earns the same net profit as one with £2m revenue and 10% net margin.
Frequently asked questions
A profit and loss (P&L) statement — also called an income statement — is a financial report that summarises a business’s revenues, costs and expenses over a period of time. It shows whether the business has made a profit or a loss. The P&L is one of the three core financial statements alongside the balance sheet and cash flow statement.
Gross profit is revenue minus the direct cost of goods sold (COGS) — the cost of producing or delivering your product or service. Net profit (the bottom line) is gross profit minus all other expenses including operating costs, interest and tax. Gross profit tells you how efficiently you produce; net profit tells you whether the whole business is profitable.
EBITDA stands for Earnings Before Interest, Tax, Depreciation and Amortisation. It approximates the cash profit generated by core business operations, stripped of financing and accounting decisions. It’s the most widely used metric for valuing businesses — UK SMEs typically sell for 3–8× EBITDA depending on sector, growth rate and quality of earnings.
UK limited companies must file annual accounts with Companies House. However, for management purposes, preparing a P&L monthly is strongly recommended — it allows you to spot trends, compare against budget, and make timely decisions. Quarterly is acceptable for very small businesses, but monthly reporting is best practice and what most lenders and investors will expect to see.
It varies significantly by sector. A net profit margin of 5–15% is generally considered healthy for UK SMEs. Service businesses (consulting, software, professional services) often achieve 15–30%, while product businesses, retail and food service typically run at 3–10%. More important than the absolute margin is the trend — improving margins over time signal a healthier, scaling business.
The main rate of UK corporation tax is 25% for companies with profits over £250,000. A small profits rate of 19% applies to companies with profits up to £50,000. Companies with profits between £50,000 and £250,000 pay a tapered rate between 19% and 25%. These thresholds apply from April 2023 onwards. Always check the current HMRC rates as they may change.