Profitability Ratios Calculator

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Profitability ratios evaluate a company’s ability to generate earnings relative to its revenue, assets, or equity, reflecting overall financial performance. More info →

Input

Revenue

Cost of Goods Sold / Cost of Sales

Operating Expense including depreciation

Depreciation & Amortisation

Non Operating Expense

Interest Expense

Tax

Total Assets

Total Current Liability

Equity

Shares Outstanding

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How This Calculator Works

Profitability ratios show how much profit a company keeps at each stage, from sales down to net profit, and how well it uses its assets and shareholders' money. The calculator builds each profit level from your inputs, then expresses it as a percentage of revenue, assets, equity or capital.

The Formulas

Gross Profit = Revenue − COGS · EBIT = Gross Profit − Operating Expenses
EBITDA = EBIT + D&A · NOPAT = EBIT × (1 − Tax ÷ Profit Before Tax)
Net Profit = EBIT − Non-Operating Expense − Interest − Tax

Margin = Profit ÷ Revenue · ROA = Net Profit ÷ Assets · ROE = Net Profit ÷ Equity · ROCE = EBIT ÷ (Assets − Current Liabilities) · EPS = Net Profit ÷ Shares

What Each Input Does

Revenue / Cost of Goods Sold: Sales and the direct cost of making them; together they give gross profit.
Operating Expense including depreciation: Running costs, including depreciation. Subtracting them gives EBIT.
Depreciation & Amortisation: Added back to EBIT to get EBITDA.
Non Operating Expense / Interest Expense / Tax: Costs below operating profit, subtracted to reach net profit. Tax ÷ profit before tax gives the effective tax rate used for NOPAT.
Total Assets / Total Current Liability / Equity / Shares Outstanding: Used for ROA, ROCE, ROE and EPS.

Step by Step

Gross profit, EBITDA, EBIT, NOPAT and net profit are worked out.
Each is divided by revenue to get its margin.
Net profit is divided by assets (ROA) and equity (ROE); EBIT is divided by capital employed (ROCE).
Net profit is divided by shares for EPS. Results are rounded to 2 decimals.

Reading the Result

Net margin above 20% – strong profitability.

Above 10% – moderate; above 0% – profitable but thin margins.

0% or below – a net loss.

Quick Example

Revenue 1,000,000, COGS 600,000, operating expenses 200,000, D&A 50,000, non-operating 10,000, interest 20,000, tax 40,000, assets 1,500,000, current liabilities 300,000, equity 800,000, 100,000 shares. Margins: gross 40%, EBITDA 25%, EBIT 20%, NOPAT 15.29% (effective tax rate 40,000 ÷ 170,000 = 23.53%), net 13%. ROA 8.67%, ROE 16.25%, ROCE 16.67%, EPS 1.30.