Income statement waterfall
Follow a rupee of revenue all the way down to profit, and see which deduction is actually deciding the company’s margin.
Runs entirely in your browser — nothing you type is sent anywhere. Educational only, and not investment advice.
How to use this calculator
Each step names a control you will find on screen above.
- Revenue
What the company sold in the year. Everything below is subtracted from this.
- Cost of goods sold
The direct cost of what was sold. Revenue minus this is gross profit, and the gross margin is the clearest single measure of pricing power.
- Operating expenses
Salaries, rent, marketing, admin — the cost of running the business rather than of making the product. What remains is operating profit.
- Interest on debt and Tax rate
The last two claims, in order. Lenders are paid before the government, and both are paid before shareholders.
- Change one step and watch the bottom
Move operating expenses by 5% of revenue and see what it does to net profit. On a thin-margin business the leverage is startling.
Worked example: A ₹1,000 crore business, line by line
Revenue of ₹1,000 crore, cost of goods 60%, operating expenses ₹250 crore, interest ₹30 crore, tax 25%.
What to enter
- Revenue
- ₹1,000 Cr
- Cost of goods sold
- ₹600 Cr
- Operating expenses
- ₹250 Cr
- Interest on debt
- ₹30 Cr
- Tax rate
- 25%
What it shows you
- Gross profit
- ₹400 Cr
- Operating profit
- ₹150 Cr
- Profit before tax
- ₹120 Cr
- Net profit
- ₹90 Cr
- If opex rises ₹50 Cr
- ₹52.5 Cr net
40% gross margin
15% operating margin
9% net margin
a 42% fall in profit
Where this is taught
A calculator gives you a number. These explain what the number means and when it misleads you.
- Fundamental Analysis11 minThe income statementFrom revenue to net profit, the four margins that matter, and why growing sales can coincide with shrinking profits.
- Market Basics11 minReading a quarterly resultResults day, decoded — what the numbers mean, why a company can beat estimates and fall 8%, and what to look at first.
- Fundamental Analysis12 minBusiness models and unit economicsBefore any ratio: how does this company actually make money, does each sale make sense, and what happens to profit when revenue doubles?
- Fundamental Analysis11 minThe tax line, and what it quietly tells youOne number most investors skip entirely. A tax rate well away from the statutory one always has a reason, and the reason is usually worth knowing.
- Fundamental Analysis11 minWhat a quarterly result does and does not tell youQuarterly numbers are limited, unaudited and seasonal. Knowing what is genuinely in them prevents most of the overreaction that follows a results day.