PL (Net Price as % of Sales) Calculator

How a P&L as a function of sales works

The Profit and Loss statement (DRE in Brazil) cascades from revenue down to net income: Sales − Deductions = Net Revenue − COGS = Gross Profit − Operating Expenses = EBITDA − Depreciation = EBIT − Interest = EBT − Income Tax = Net Income. Modelling P&L as a function of sales means splitting costs between variable (proportional to revenue, like COGS) and fixed (constant within the relevant range, like rent and salaries).

Example: sales R$ 100,000, COGS R$ 40,000 (40% variable), fixed expenses R$ 20,000, tax 10%. Net Revenue = 100,000 − 10,000 = R$ 90,000; Gross Profit = 90,000 − 40,000 = R$ 50,000 (gross margin 55.6%); Net Income = 50,000 − 20,000 = R$ 30,000 (net margin 33.3%). Break-even sales (net income = 0) = fixed_costs ÷ contribution_margin = 20,000 ÷ 0.50 = R$ 40,000.

Where this is used in practice

Corporate budgeting and forecasting uses sales-driven P&L to project quarterly results under best/base/worst scenarios. DCF valuation uses it to derive Free Cash Flow (FCF = Net Income + D&A − CapEx − ΔWC). MBA and CFA candidates model it for case interviews. Operators use it to size break-even, target margins and CapEx headroom.

FAQ

What's the difference between gross and net margin? Gross margin = Gross Profit ÷ Net Revenue (measures product economics). Net margin = Net Income ÷ Net Revenue (measures the business as a whole, after operating costs, depreciation, interest and taxes).

How do I compute break-even? Find the sales level at which Net Income = 0. With constant variable-cost ratio and fixed costs, BE_sales = fixed_costs ÷ (1 − variable_cost_ratio).

Why separate EBITDA from EBIT? EBITDA strips out non-cash items (depreciation, amortization) and is the closest accounting proxy to operating cash flow — heavily used in multiples (EV/EBITDA) and debt covenants.

How does tax affect the sensitivity to sales? Income tax is applied on EBT (pre-tax profit), so it scales with profit, not revenue. Indirect taxes (ICMS, PIS/COFINS) scale with sales and reduce Net Revenue directly.