Formula reference

Business formulas for clearer decisions

Review the definition first, then use a transparent calculator to test scenarios. Each result is an estimate based on the inputs and assumptions you provide.

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Core formulas

Gross margin

(Revenue − direct cost) ÷ revenue × 100

Shows the share of sales left after the direct cost of what was sold.

Net profit margin

Net profit ÷ revenue × 100

Shows the modeled bottom-line profit as a share of revenue.

Markup

(Selling price − cost) ÷ cost × 100

Measures the price increase relative to cost; it is not the same as margin.

Break-even units

Fixed costs ÷ contribution margin per unit

Estimates how many units cover fixed and variable costs under the inputs.

ROI

(Final value − investment) ÷ investment × 100

Compares net gain with the original investment without adjusting for time or risk.

Revenue growth

(Current revenue − prior revenue) ÷ prior revenue × 100

Measures percentage change between comparable periods.

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Related business calculators

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Profit MarginCalculate gross profit, gross margin, and markup from sales revenue and direct cost.Net Profit MarginCalculate net profit and net margin after direct costs, operating expenses, interest, and taxes.Operating MarginCalculate operating profit and operating margin after direct costs and operating expenses.MarkupFind a selling price and gross profit from product cost and a chosen markup percentage.Break-EvenCalculate the unit sales and revenue needed to cover fixed and variable costs.ROIMeasure return on investment and net gain from a project, campaign, or purchase.Revenue GrowthCalculate revenue growth rate, dollar change, and the revenue needed for a target growth rate.CACCalculate average customer acquisition cost from sales and marketing spending.Customer LTVEstimate customer lifetime revenue and gross-profit value from purchase behavior and margin.

Use consistent definitions

Before comparing periods or businesses, confirm that revenue, direct costs, operating expenses and time periods are defined consistently. A mathematically correct formula can still mislead when inputs use different accounting boundaries.

These tools are educational and do not replace professional accounting, tax, legal, lending or investment advice.