Break-Even With Target Profit Calculator

About this calculator

Standard break-even analysis finds where revenue covers costs exactly; this variant extends the formula to find the sales volume needed to also clear a specific profit target: Target Units = (Fixed Costs + Target Profit divided by (1 - Tax Rate)), divided by Contribution Margin per Unit, where contribution margin is price minus variable cost per unit. Dividing the after-tax target by (1 - tax rate) grosses it back up to the pre-tax profit the business actually needs to earn.

Business owners and finance teams use this to answer a more useful question than plain break-even: not just how many units keep them from losing money, but how many units get them to the profit they actually need this quarter. The margin of safety — how far current or projected sales sit above the break-even point — comes along with it, showing how much revenue could drop before the business slips from profitable back to merely break-even.

This calculator takes your fixed costs, price, variable cost per unit, tax rate and after-tax profit target and returns the units and revenue needed, plus your margin of safety.