Profit Calculator

The profit calculator shows the profit value between the r1 and selling price of an item. It also shows the profit and mark up percentage, and calculates discounted selling prices. The unit values for both r1 and selling price are also shown

Profit, The Basic Grounds for Operating a Business

The whole concept of running a business revolves around profit. You might be a manufacturer, a trader or a service provider, the first thing that comes to mind about running a business is profit. The business profit margin is a percentage, which represents the revenue earned by a business after all expenses have been met.

The business profit margin helps you understand how much profit is earned by your business related to its revenue. It is always better to express the profit in terms of the percentage as it helps you compare the profits with similar companies. The profit can be calculated in two different ways that are discussed in the following paragraph.

Types Of Business Profit

The Gross Profit

The gross business profit is the simplest method to calculate business profit. It defines profit as an income that remains after the cost of the goods sold (COGS) is taken into account. COGS includes the expenses which have a direct association with the production of items for sale and the labor wages.

This includes the costs required to assemble or manufacture the goods. Any other expenses for taxes, debts or overhead costs or one-time expenditures for the purchase of equipment are not considered.

The gross profit margin is needed for comparing the gross profit to the total revenue, portraying the percentage of each revenue dollar that is held as profit after the cost of production is paid.

The Net Profit

The net income reflects a clearer picture of the total amount of revenue which is left after every kind of expense. Additional income streams are also considered in net business profit calculation. The COGS and the operational expenses are included in these calculations. Above all, it also includes the payments on the taxes, debts, the one-time expenses or payments and if there are any income from investments or other secondary operations. The net business profit is the true reflection of the company's ability to convert income into a profit.

To obtain values for both kinds of profits, you can use an online calculator; all you have to do is enter the relevant values into the calculator. Let's take a look at how a calculator determines the value of your profits.

Using a calculator to find out your business profit

You need to enter the following details in order to get the results:

Cost & Selling Price

• Cost Price: Enter the cost price and relevant unit value.
• Selling Price: Enter the Selling price and relevant unit value.

Quantity Values

• Quantity: Enter the total quantity sold or expected to be sold.
• Discount: Enter the discount value per unit relevant to selling price, if applicable.

On the basis of the above inputs, the calculator will provide you with the following results:

• Cost: This will show you the cost per unit as well as total cost for the entire quantity.
• Selling Value: This will reflect the selling value per unit and total value of the entire quantity, less any discounts.
• Profit: This will reflect the profit per unit and total profit relevant to the total quantity.
• Markup percentage: This is the profit percentage or profit margin percentage of the entire quantity after discounts (if applicable).

The business profit calculator designed by iCalculator is an online tool that is free to use, you can take advantage of the calculator in different ways as it is easy to use and simplifies the calculations that would take much more effort if done manually.

You will know the profit value of a single unit as well as for multiple units according to the numbers you enter, this will help you decide if you are generating enough revenue to meet your business profit targets.

Additionally, you can take a hint from the results if you need to make improvements to reduce the cost, if possible, or increase the selling price in order to generate desired profits. This approach can also support re-investment for increased profits.

Using the calculator is convenient, however, you should consider a few things before using it. Let's take a brief look at these factors in order to get the full advantage of the calculator.

Consider this before using the calculator

Business profit calculations are fully based on the industry. The values should never be compared across different industries. The business owners in certain industries might make higher profits compared to others as the economic conditions are different for different industries.

The profit margin is not the measurement of how much money one makes in total, but how much revenue has been generated for each unit of your product.

In short,The business profit calculator is a very useful tool when used carefully after considering its limitations and along with other methods available to assess business profitability.