Profit and break-even point
Estimate monthly revenue, profit before tax and the number of sales needed to cover fixed costs.
How the calculation works
Revenue = price × units sold. Contribution per sale = price × (1 − fee / 100) − variable cost. Profit = contribution × units − fixed costs. Break-even is fixed costs divided by contribution, rounded up to a whole sale.
Worked example
Example: price 40, variable cost 15, fee 3%, sales 100 and fixed costs 1,300. Contribution is 40 × 0.97 − 15 = 23.80. Revenue is 4,000, profit before tax is 1,080 and break-even is 55 sales.
Understanding the result
With a positive contribution, 55 sales cover the stated fixed costs. If contribution is not positive, increasing sales cannot cover them.
Limits and assumptions
The model assumes the same price, fee and variable cost for every unit. It excludes tax, returns, seasonality, multiple products and other costs.
Related reading
Calculations run in your browser and are not personalised financial advice.