Gross Profit Margin Calculator
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UPDATED: Sep 28, 2012
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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.