What is the difference between gross profit, EBIT, and net profit?

Gross Profit = Revenue − Cost of Goods Sold (COGS). EBIT (Earnings Before Interest and Tax) = Gross Profit − Operating Expenses. EBIT is the same as Operating Profit. Net Profit = EBIT − Interest − Tax. UK/EU financial reporting often uses EBITDA (adds back Depreciation/Amortization) as a measure of cash earnings.

What is a good net profit margin by industry?

Net margin benchmarks: Banks/Financial services: 15–30%. Technology/SaaS: 15–25%. Healthcare: 10–20%. Retail: 2–6%. Restaurants: 3–9%. Construction: 2–5%. Grocery: 1–3%. A net margin above 10% is considered strong across most industries. German Mittelstand firms typically target 5–8% net margin as sustainable.

How is EBITDA different from EBIT?

EBITDA = EBIT + Depreciation + Amortization. It excludes non-cash charges, making it useful for comparing profitability across companies with different capital structures. UK private equity firms commonly value businesses at 6–10× EBITDA. US tech companies often use EBITDA multiples of 15–30×. EBITDA is NOT the same as cash flow — it ignores capex and working capital changes.

📊 Gross Profit 💼 EBIT / EBITDA 💰 Net Profit

Profit Calculator

Calculate gross profit, EBIT (operating profit), and net profit from revenue, costs, and tax. UK/EU reporting uses EBIT and EBITDA; US reporting emphasizes net income.

Quick Answer

Gross Profit = Revenue − COGS. EBIT = Gross Profit − OPEX. Net Profit = EBIT − Interest − Tax. Average net margins: Retail 2–6%, Tech 15–25%, Banking 20–30%. UK/EU M&A valuations commonly use EBITDA multiples (6–12×).

Revenue / Sales ($)

Cost of Goods Sold — COGS ($)

Operating Expenses — OPEX ($)

Interest Expense ($)

Tax Rate (%)

Net Profit Margin by Country Context

Sector	🇺🇸 US Avg	🇬🇧 UK Avg	🇩🇪 Germany
Technology	18–28%	12–20%	8–15%
Retail	3–6%	2–5%	2–4%
Manufacturing	6–12%	4–9%	5–10%
Healthcare	8–15%	3–8%	4–8%
Financial Services	20–30%	15–25%	10–20%