# How much profit will I make?

Computes the profit, revenue, total cost, profit per unit, margin, markup and break-even units from a unit cost, a selling price, the quantity sold, a discount and other costs.

- Page: https://www.acalculator.org/finance/profit-calculator
- JSON spec: https://www.acalculator.org/finance/profit-calculator.json
- Version: f3fde197c971

## Default answer

Example with the default inputs (Cost per unit $12.00, Selling price per unit $20.00, Units sold 500, Discount 0%, Other costs $0.00): Selling 500 units at $20.00 with a cost of $12.00 each makes a profit of $4,000.00.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| cost | Cost per unit | What one unit costs you to buy or make. |
| price | Selling price per unit | The price you sell one unit for, before any discount. |
| quantity | Units sold | How many units you sell. |
| discount | Discount | A discount off the selling price, as a percent. Leave at 0 for none. |
| other | Other costs | Costs for the whole batch that do not depend on the units: shipping, fees, rent, ads. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| profit | Profit | Revenue minus total cost. Negative for a loss. |
| revenue | Revenue | Selling price × (1 − discount ÷ 100) × units sold. |
| totalCost | Total cost | Cost per unit × units sold + other costs. |
| perUnit | Profit per unit | Profit ÷ units sold. |
| margin | Profit margin | Profit ÷ revenue × 100, to 2 decimals (halves up). Left out when the revenue is 0 or the margin is beyond ±1 trillion percent. |
| markup | Markup | Profit ÷ total cost × 100, to 2 decimals (halves up). Left out when the total cost is 0 or the markup is beyond ±1 trillion percent. |
| breakEven | Units to break even | The fewest whole units that cover every cost: other costs ÷ (price after discount − cost per unit), rounded up. Left out when there are no other costs, or when a unit sells for no more than it costs. |

## Method

revenue = price × (1 − discount ÷ 100) × units; total cost = cost per unit × units + other costs; profit = revenue − total cost; margin = profit ÷ revenue × 100; markup = profit ÷ total cost × 100; break-even units = ⌈other costs ÷ (price after discount − cost per unit)⌉.

## Assumptions

- Every unit sells at the same price and costs the same. The discount applies to every unit.
- Profit is before income tax. Other costs are for the whole batch and do not change with the units.
- Arithmetic is exact on the typed decimals; money shows to the cent, and the margin and markup to 2 decimals, halves up.

## Worked examples

1. cost = $15.00, price = $25.00, quantity = 100 gives revenue = $2,500.00, totalCost = $1,500.00, profit = $1,000.00, perUnit = $10.00, margin = 40%, markup = 66.67%.
2. cost = $12.00, price = $20.00, quantity = 500, discount = 10%, other = $1,500.00 gives revenue = $9,000.00, totalCost = $7,500.00, profit = $1,500.00, perUnit = $3.00, margin = 16.67%, markup = 20%, breakEven = 250. Source: U.S. Small Business Administration, "Calculate your startup costs": break-even units = fixed costs ÷ (price − variable costs) (https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs).
3. cost = $9.99, price = $12.50, quantity = 3, other = $10.00 gives revenue = $37.50, totalCost = $39.97, profit = -$2.47, perUnit = -$0.82, breakEven = 4. Source: U.S. Small Business Administration, "Calculate your startup costs": break-even units = fixed costs ÷ (price − variable costs) (https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs).

## FAQ

### How do I calculate profit?

Subtract the total cost from the revenue. Selling 100 units at $25 that cost $15 each brings in $2,500 of revenue for $1,500 of cost, a profit of $1,000.

### What is the difference between profit, margin and markup?

Profit is a dollar amount: revenue minus cost. Margin is the profit as a percent of the revenue, and markup is the profit as a percent of the cost. The $1,000 profit above is a 40% margin (1,000 ÷ 2,500) and a 66.67% markup (1,000 ÷ 1,500).

### How does a discount change my profit?

A discount lowers the price of every unit, so it comes straight out of your profit. At $20 with 10% off, each unit sells for $18. On 500 units that is $1,000 less revenue, and $1,000 less profit.

### What are other costs?

Costs for the whole batch that do not change with the number of units, such as shipping a whole order, platform fees, rent or advertising. They are added once to the total cost.

### How many units do I need to sell to break even?

Divide your other costs by what each unit earns after its own cost (the price after discount minus the cost per unit), then round up. With $1,500 of other costs and $6 earned per unit, you break even at 1,500 ÷ 6 = 250 units.

### Is this profit before or after tax?

Before tax. Income tax on the profit depends on your business type and tax situation, so it is not included.

### How is the answer rounded?

The calculator works with the exact decimals you type. Money shows to the cent, and the margin and markup to 2 decimals, with halves rounded up.

## Sources

- U.S. Small Business Administration, "Calculate your startup costs": break-even point = fixed costs ÷ (price − variable costs). https://www.sba.gov/business-guide/plan-your-business/calculate-your-startup-costs
- OpenStax, Principles of Accounting, Volume 2: Managerial Accounting, section 3.3 "Perform Break-Even Sensitivity Analysis". https://openstax.org/books/principles-managerial-accounting/pages/3-3-perform-break-even-sensitivity-analysis-for-a-single-product-under-changing-business-situations