Business Tools

Profit Calculator

Calculate profit, margin, and ROI from revenue and costs. Analyze business profitability with profit percentage, markup, and breakeven point.

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About this tool

Profit is the financial gain when revenue exceeds costs. Formula: Profit = Revenue - Cost. Profit Margin % = (Profit ÷ Revenue) × 100. Critical for business health and decision-making.

Gross profit (revenue minus COGS) differs from net profit (after all expenses). Positive profit margin means sustainable business. Use markup for pricing, margin for profitability analysis, ROI to evaluate investment efficiency.

Usage examples

Product Sale

Single product profit

Sell for $150, cost $90 → Profit $60, Margin 40%, Markup 66.67%

Monthly Business

Monthly revenue analysis

Revenue $50,000, Cost $35,000 → Profit $15,000, Margin 30%, ROI 42.86%

Breakeven Analysis

Find minimum sales

Fixed cost $10,000, unit profit $25 → Need 400 units to breakeven

How to use

  1. Enter "Revenue" (total sales amount).
  2. Enter "Cost" (total expenses/COGS).
  3. Click "Calculate" to see profit and margin.
  4. View ROI, markup, and breakeven analysis.

Benefits

  • Calculate profit & margin
  • ROI calculation
  • Markup vs margin comparison
  • Breakeven point analysis
  • Profitability indicators
  • Multiple profit metrics

FAQs

What is the difference between profit and profit margin?

Profit = dollar amount earned (Revenue - Cost). Profit Margin = percentage of revenue that is profit (Profit ÷ Revenue × 100). Example: Revenue $100, Cost $60 → Profit $40 (dollar amount), Margin 40% (percentage). Margin shows efficiency - higher margin means keeping more of each sale. 10% margin = $10 profit per $100 revenue. Use margin to compare businesses of different sizes.

How do you calculate profit margin percentage?

Formula: Profit Margin % = (Profit ÷ Revenue) × 100. Or: ((Revenue - Cost) ÷ Revenue) × 100. Example: Revenue $200, Cost $130 → Profit $70 → Margin = $70 ÷ $200 × 100 = 35%. Common mistake: dividing by cost (that's markup, not margin). Always divide by revenue for margin. 20% margin means 20¢ profit per $1 revenue.

What is a good profit margin for a business?

Varies by industry. Grocery: 1-3%. Restaurants: 3-5%. Retail: 5-10%. SaaS software: 70-90%. Consulting: 15-25%. Manufacturing: 5-20%. Higher margin = more profitable. Consider: Industry average (competitor comparison), business stage (startups often sacrifice margin for growth), operating costs, pricing strategy. 10%+ margin generally healthy for most businesses.

What is the difference between markup and profit margin?

Markup = profit as % of COST. Margin = profit as % of REVENUE. Example: Cost $50, sell $100, profit $50. Markup = $50/$50 = 100%. Margin = $50/$100 = 50%. Same profit, different percentages. Markup for pricing decisions (add to cost). Margin for profitability (percentage of sales). Markup can exceed 100%, margin cannot. 100% markup = 50% margin. Always specify which you mean.

How do you calculate ROI (Return on Investment)?

ROI = (Profit ÷ Cost) × 100. Measures efficiency of investment. Example: Invest $1,000, earn $1,300 → Profit $300 → ROI = $300/$1,000 × 100 = 30%. Positive ROI = profitable. 100% ROI = doubled money. 0% ROI = broke even. Negative = loss. Compare investment options: real estate 8-12%, stock market 7-10% (historical average), business ventures vary widely.

What is breakeven point and why is it important?

Breakeven = when revenue equals costs (zero profit). Important: Minimum sales to avoid losses, pricing strategy validation, business viability check. Formula: Breakeven Units = Fixed Costs ÷ (Price - Variable Cost per Unit). Example: Fixed costs $10,000/month, sell at $50, variable cost $30 → Breakeven = $10,000 ÷ $20 = 500 units/month. Below breakeven = losing money. Useful for: startups, new products, pricing decisions.

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