- Net profit
- $6,000
- Profit margin
- 10.0%
- Total cost
- $54,000
- Revenue per mile
- $2.40/mi
- Cost per mile
- $2.16/mi
- Profit per mile
- $0.24/mi
How it works
Net profit is gross revenue minus total cost (fixed plus variable). Margin is net profit as a percentage of revenue. Profit per mile is net profit divided by total miles.
The per-mile figures let you compare against a load rate: if revenue per mile is close to cost per mile, the margin per mile — the gap — is thin no matter how big the gross looks.
Assumptions
- Revenue and costs are for the same period.
- Fixed and variable costs together are your full cost of operating — nothing is left off.
- This is profit before interest and taxes; it does not model financing or your tax situation.
- Total miles includes deadhead.
Worked example
On $60,000 of revenue in a quarter with $24,000 fixed and $30,000 variable costs over 25,000 miles: total cost $54,000, net profit $6,000, margin 10%, and profit per mile about $0.24. Revenue per mile is $2.40 and cost per mile $2.16 — the $0.24 gap is the whole profit.
FAQ
Does this include my own pay?
If you pay yourself a wage that runs through variable or fixed costs, include it there and the "net profit" is what is left over after paying yourself. If not, treat net profit as your pay plus profit combined.
Why is a big gross revenue not enough?
Because costs scale with it. Margin and profit per mile show whether the revenue is actually leaving anything behind.
Guides: Understanding cost per mile
Questions: What is a good operating ratio for a small carrier?, How do I price a load?
Terms: Operating Ratio, Revenue Per Mile, Cost Per Mile