Profit Definition Our online Profit Calculator is a must for any business. This calculator will calculate the amount of profit you can expect to receive in one month, based on the variables that you enter. Because you enter the actual cost and the percentage of profit margin, you will receive a reliable calculation for how much you can expect to make from total sales. Try this FREE calculator today!
How to Use the Calculator
Enter the amount you will charge the customer into the first field, labeled, “Cost of Good/Service”.
Enter the number you expect to sell in one month into the field, labeled “New Sales a Month”.
Enter the profit margin percentage that you calculated into the field, labeled, “Profit Margin (%)”.
Press the “Calculate” button.
Below the calculate button, you will see the total amount that will be received from sales in a month, followed by the amount of profit that you can expect to make from those sales.
Cost of Good/Service Definition The cost of good or service is the total amount that you will be charging the customer for this particular good or service. Be sure to include the total amount that they will be charged, even if this amount includes extra fees, which are related to the good or service and do not have to be paid to someone else. As an example, you would not include the amount for tax in the total cost, since that amount must be sent to the proper taxing authority.
New Sales a Month Definition When thinking of new sales per month, you must think of all possible sales that will be generated for this particular good or service. Of course, this will be an estimate. Unless you are a brand new business, or this is a brand new product or service, you can probably use an estimate from a previous month. A better estimate might be to average the last several months to get an average of how many of this good or service you can expect to sell each month. If you are a new business, or you are selling a new product, you will need to just make the best estimate you can. Remember, that this type of estimate may not be accurate. And, you will need to keep this in consideration when you see the calculation that is generated.
Profit Margin (%) Definition The profit margin, as used in this online calculator, is a percentage which tells how much of the amount charged to the customer is returned to you as profit. To determine the profit margin, you will need to follow the following steps:
Subtract your cost for the item or service from the amount you charge the customer. This will tell you the amount of profit that you make from each good or service.
Multiply the profit amount by 100.
Divide that answer by the amount that you will charge the customer for the good or service. The answer to this is the profit margin percentage. This is the number that you should enter into the calculator for that field.
Reasons to Use the Calculator This online calculator can be used to determine if you are charging enough for your products. Perhaps you are selling more than you can produce, but your company is still going in the red. This calculator will help you determine if you might need to raise the price of your goods or services so that you can make enough profit to meet your needs.
How to Calculate Profit Let's be honest - sometimes the best profit calculator is the one that is easy to use and doesn't require us to even know what the profit formula is in the first place! But if you want to know the exact formula for calculating profit then please check out the "Formula" box above.