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Target Profit Sales Calculator

Enter your fixed costs, variable cost ratio, and target profit to instantly calculate the sales you need to reach that profit. It also shows your break-even sales and contribution margin ratio. A free tool for business plans and budgeting.

Input

$
$

How to enter variable costs

%

Result

Sales needed to reach your target profit

$10,000,000.00

Hit this sales figure and you cover your fixed costs while leaving your target profit

Break-even sales

$7,500,000.00

Contribution margin ratio

40 %

Target profit

$1,000,000.00

Variable cost ratio 60% / Fixed costs $3,000,000.00

How it works

  • Required sales is calculated as "(fixed costs + target profit) / contribution margin ratio" — the sales needed to cover your fixed costs and still leave your target profit.
  • The contribution margin ratio is "1 - variable cost ratio." The variable cost ratio is the share of sales taken up by costs that rise in proportion to sales (purchases, materials, sales commissions, and so on).
  • Break-even sales is calculated as "fixed costs / contribution margin ratio" — the sales level at which you make neither a profit nor a loss.
  • You can enter the variable cost ratio directly as a percent, or derive it as "variable cost / sales" from actual sales and variable cost amounts. If variable cost is greater than or equal to sales there is no contribution margin, so it cannot be calculated.
  • Enter fixed costs, variable costs, and target profit for a consistent period — annual with annual, monthly with monthly. The resulting sales figure covers that same period.
  • This tool is a rough estimate based on a simplified model that assumes constant fixed costs, variable costs, and contribution margin. Real businesses will differ due to cost classification, taxes, inventory effects, and more. Consult a tax accountant or CPA for management decisions.