Sara Routhier, Director of Outreach and Managing Editor of Features, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overw...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 28, 2012

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

This gross profit calculator is meant to give small business owners a look into how much money they’re making after factoring in their costs of the product or service they’re selling.

By filling out both the total profit brought in through sales and the total cost of whatever product or service a company is offering, users can quickly see the amount of profit (or lack thereof) that they’re generating.

For instance, if a business owner is bringing in $10,000 a month selling a product that he’s paying $6,000 a month to stock, this gross profit calculator will reveal that the owner is making a profit of 40 percent.

Another way of looking at that percentage is that 40 percent (or 40 cents) of every dollar earned is being put towards the purchase of product.

If the business profit calculation reveals a negative percentage, then a user can immediately see that they’re losing money on the good or service they’re selling.

For instance, monthly sales equating to $5,000 on a product that costs $6,000 to keep stocked will yield a gross profit margin of -20 percent. In other words, a business owner in this example would be spending $1.20 cents for every dollar earned.

Gross profit calculators are important tools for business owners to determine how profitable a certain product or segment of their company is. If profit is present, then an entrepreneur knows they can afford a new business loan to expand even further. On the other hand, if profit is absent, then taking out a small business loan may be a risky endeavor.

If you would like to apply for a business loan after running these profit tests, fill out the application that will be generated in the results below.