Build a full income statement from revenue down to net income, with margins, EPS, and tax scenario comparison
| Net margin | Category | What it means |
|---|
| Line item | Amount | % of revenue |
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| Sector | Typical net margin range | Your margin vs. benchmark |
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| Tax rate | Tax expense | Net income | Net margin | EPS |
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| Metric | Value | Notes |
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Founder & CEO, Toolraxy
Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.
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Net income is what’s left after a business pays for everything: direct costs, overhead, debt service, and taxes. It’s the number that flows into retained earnings and drives earnings per share. A company can grow revenue aggressively and still post a net loss if costs climb faster.
This calculator walks through each line of the income statement in order. You supply the inputs, it handles the arithmetic and the margins. Beyond the basic number, you get a waterfall view showing each line as a percentage of revenue, a tax scenario table that quantifies how rate changes affect earnings, and a target margin solver that tells you how much pre-tax income you’d need to hit a specific net margin.
How to Use the Net Income Calculator
Select your currency from the dropdown.
Enter total revenue and cost of goods sold.
Add operating expenses, which covers SG&A, R&D, and depreciation.
Enter interest expense on any debt.
Include other non-operating income if applicable. Leave it at zero otherwise.
Set your effective tax rate. The default is 21%.
Enter shares outstanding and any preferred dividends for the EPS calculation.
Choose an industry profile and target margin, then hit Calculate.
The income statement builds top-down. Each line subtracts from the one above it.
Formula: Gross Profit = Revenue − COGS
Formula: Operating Income (EBIT) = Gross Profit − Operating Expenses
Formula: Pre-Tax Income (EBT) = EBIT − Interest + Other Income
Formula: Net Income = Pre-Tax Income − (Pre-Tax Income × Tax Rate)
Tax expense applies only to positive pre-tax income. If EBT is negative, the calculator treats tax as zero and net income equals pre-tax income.
Earnings per share divides net income minus preferred dividends by shares outstanding. The calculator handles zero or missing share counts without breaking. The target margin solver works backwards: it multiplies revenue by your target margin, then divides by one minus the tax rate to find the required pre-tax income.
A specialty foods manufacturer reports $6,400,000 in revenue. COGS runs $3,850,000. Operating expenses total $1,420,000. Interest on a equipment loan is $95,000. No other income. Tax rate is 24%. Shares outstanding: 850,000. No preferred dividends.
Gross profit: $2,550,000. Gross margin: 39.84%.
Operating income: $1,130,000. Operating margin: 17.66%.
Pre-tax income: $1,035,000. Pre-tax margin: 16.17%.
Tax expense: $248,400. Net income: $786,600. Net margin: 12.29%.
EPS: $0.93.
Against the Consumer Staples benchmark (5%–10% net margin), this company sits comfortably above the range. The gap between gross margin and net margin is mostly operating expenses, which is where most of the value leaks out.
Start with revenue. Subtract COGS, operating expenses, and interest. Add any non-operating income. Multiply the result by one minus your tax rate. That gives you net income.
Five to ten percent is healthy for most established businesses. Software and pharma often run higher. Retail and distribution run lower. The industry benchmark matters more than the absolute number.
Net income includes non-cash items like depreciation and accrual-based revenue. Cash flow measures actual money movement. A profitable company can still run short on cash if customers pay slowly.
Interest reduces pre-tax income dollar for dollar, then the tax rate reduces the impact. A $100,000 interest expense at a 25% tax rate cuts net income by $75,000, not $100,000.
EPS equals net income minus preferred dividends, divided by shares outstanding. The result tells you how much profit each share represents.
Yes. If a company has significant non-operating income, such as gains on investments or asset sales, net income can exceed operating income. It’s unusual but it happens.
A one-point change in the tax rate changes EPS by roughly one percent of pre-tax earnings per share. The calculator shows this across five scenarios in the tax table.
Gross margin is gross profit divided by revenue. Net margin is net income divided by revenue. The gap between them represents operating expenses, interest, and taxes.
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