Desired Profit Calculator
Calculate the required revenue to achieve your target profit based on costs and expenses
Cost Breakdown
Cost Type | Amount | % of Revenue |
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A Desired Profit Calculator helps businesses determine the required revenue needed to achieve a specific profit target after accounting for all costs. This tool is essential for:
Setting sales targets
Pricing strategies
Financial planning
Budgeting and forecasting
Key Components of a Desired Profit Calculator
1. Input Fields
The calculator should include:
Profit & Cost Inputs
Desired Profit Amount (The target profit you want to achieve)
Fixed Costs (Rent, salaries, utilities, insurance, etc.)
Variable Costs per Unit (Cost of Goods Sold - COGS)
Selling Price per Unit (Revenue per item/service)
Optional Inputs
Tax Rate (If calculating after-tax profit)
Commission/Discounts (If applicable)
Calculation Methods
1. Required Revenue to Achieve Desired Profit
Alternatively, if you know the Contribution Margin (Selling Price - Variable Cost):
2. Break-Even Analysis (Zero Profit Scenario)
3. After-Tax Profit Adjustment
If calculating net profit after taxes:
Then, recalculate required revenue using this adjusted profit figure.
Example Calculation
Input | Amount ($) |
---|---|
Desired Profit (After Tax) | $10,000 |
Fixed Costs | $5,000 |
Variable Cost per Unit | $15 |
Selling Price per Unit | $40 |
Tax Rate | 20% |
Step 1: Calculate Pre-Tax Profit Needed
Step 2: Determine Required Sales in Units
Step 3: Calculate Required Revenue
Verification:
Total Revenue: $28,000
Variable Costs: 700 × $15 = $10,500
Fixed Costs: $5,000
Pre-Tax Profit: $28,000 - $10,500 - $5,000 = $12,500
After-Tax Profit: $12,500 × (1 - 0.20) = $10,000 (Target Achieved)
Features of an Effective Desired Profit Calculator
✅ Multiple Calculation Modes (Pre-tax/After-tax, Unit/Revenue-based)
✅ Interactive Sliders (Adjust costs & profit targets dynamically)
✅ Graphical Output (Shows break-even point and profit zones)
✅ Scenario Analysis (Compare different pricing strategies)
✅ Exportable Reports (For financial presentations)
Benefits of Using This Calculator
✔ Goal-Oriented Planning – Sets clear revenue targets.
✔ Pricing Strategy Optimization – Tests how price changes impact profitability.
✔ Cost Control – Identifies cost reduction opportunities.
✔ Investor & Lender Ready – Provides data-backed financial projections.
✔ Time-Saving – Eliminates manual guesswork in profit planning.