What is net operating profit?

Net operating profit is the bottom line of the in-app P&L: revenue, minus cost of goods, minus shipping and payment fees (together, contribution margin), minus operating expenses — rent, salaries, software, and advertising. It is the closest number the app has to "did the business make money this month", stopping short only of taxes, interest and depreciation.

Formula

net operating profit = contribution margin − operating expenses
                       (per calendar month)

Worked example

A month reads: €110,000 revenue, €58,000 COGS, leaving €38,500 of contribution margin after shipping and fees. Operating expenses total €31,000 — €14,000 of tracked ad spend plus €17,000 of entered opex. Net operating profit: €7,500. The same month's MER looked comfortable at 2.75×; the P&L is where the fixed-cost base turns a comfortable ratio into a thin absolute.

How Saldo Metrics computes it

v_pnl_period builds one row per month: revenue, COGS and contribution margin summed from v_contribution_margin (net sales only), and opex summed from v_pnl_opex_by_category. Two honesty rules shape it. Advertising is automatic: tracked ad spend flows into the P&L as its own expense line even before any expense category is configured — dropping it would overstate profit, so the view emits the advertising line regardless. Uncosted months stay unknown: a month whose margin can't be fully computed shows NULL margin with its uncosted revenue reported beside it, never a zero that reads as a collapse. Other operating expenses come from the opex module (manual entries and imports), each spread over its covered months and convertible per occurrence; the statement widget then pivots months into the familiar revenue-to-profit layout with one line per expense category.

Why it matters

Every other profitability metric in the app is per-something — per order, per channel, per SKU. Net operating profit is the only one that must absorb the fixed costs, which is where "profitable on every order" businesses discover they are unprofitable in total. Watching it monthly next to MER separates margin problems from cost-base problems.

Common mistakes

• Reading it as cash flow. Expenses are spread over the months they cover and orders book by order date; timing differs from the bank account.
• Trusting it with an empty opex module. Before non-advertising expenses are entered, the figure is contribution margin minus ad spend only — an upper bound, not a P&L.
• Comparing months across a cost-coverage change. Margin completeness moves the line; the uncosted-revenue column says how comparable two months are.

Where you see this in the app

The P&L Statement dashboard widget, months across, revenue-to-profit lines down.