Business Calculator
Operating Outlook
See how monthly operating profit changes when revenue and fixed costs move together. Enter revenue, the share of revenue that goes to variable costs, and monthly fixed costs.
Operating profit in this calculator is before financing and taxes. The base, downside, and upside cases are planning estimates, not financial advice or forecasts.
Preparing these fields.
Operating profit
Operating profit is what remains after variable costs and fixed operating costs are subtracted from monthly revenue. It does not subtract loan payments, owner financing, income taxes, or one-time purchases.
Operating margin
Operating margin is operating profit divided by monthly revenue. A positive margin means the entered month covers both variable and fixed costs. A negative margin means it does not. When revenue is zero, the margin is undefined because there is no revenue to divide by. Profit can still be shown.
Fixed versus variable costs
Variable costs change with revenue. A 30% variable-cost rate means 30 cents of every revenue dollar goes to those costs. Fixed costs are entered as a monthly amount, such as rent or a base payroll, and do not change when revenue changes in the base case. The downside illustration raises that fixed-cost amount by 10% while leaving the variable-cost rate unchanged.
Break-even revenue
Break-even revenue is the monthly revenue at which operating profit is zero. If variable costs consume the entire revenue dollar and fixed costs are still above zero, no finite revenue level covers those fixed costs. If variable costs consume the entire revenue dollar and fixed costs are zero, operating profit is zero at every revenue level.
Scenario analysis
The downside case reduces revenue by 15% and increases fixed costs by 10%. The upside case increases revenue by 15% and leaves fixed costs unchanged. Neither case predicts what will happen. They show the arithmetic result of those stated changes.
A worked example
Suppose monthly revenue is $10,000, variable costs are 30% of revenue, and monthly fixed costs are $5,000. Variable costs are $3,000, so $7,000 remains toward fixed costs. Base operating profit is $2,000, and the base operating margin is 20%. Base break-even revenue is approximately $7,142.86. With the same entries, the downside illustration produces $450 of operating profit, and the upside illustration produces $3,050.
Important limitations
These figures are planning estimates. They are not a forecast, a valuation, or financial, tax, legal, or lending advice. Actual results can differ because of taxes, debt payments, owner pay, seasonality, one-time costs, and costs that do not stay at a constant percentage of revenue.