Profit & Break-even Calculator

Enter revenue, cost of sales and fixed costs to see gross profit, net profit, both margins, and the revenue you need to break even.

Why break-even is the number to watch

Break-even revenue is the point at which gross profit exactly covers fixed costs. Below it you are making a loss regardless of how busy you are; above it, each additional sale contributes to profit at your gross margin rate.

It follows that improving gross margin lowers your break-even point far faster than cutting fixed costs does, which is usually the more useful lever to pull first.

Splitting your costs correctly

The split between cost of sales and fixed costs is what makes this calculation meaningful. Cost of sales moves with volume. Fixed costs do not change much whether you sell one unit or a thousand. If a cost partly does both, put the variable part in cost of sales.

Frequently asked questions

What is the difference between gross and net profit?

Gross profit is revenue minus cost of sales. Net profit is what remains after fixed costs as well. A business can have a healthy gross margin and still lose money if fixed costs are too high.

My break-even looks impossible. What does that mean?

If your gross margin is very thin, the revenue needed to cover fixed costs becomes very large. That is a real signal, not a calculation error: either pricing needs to change, direct costs need to come down, or the fixed cost base is too heavy for the model.