Five small business calculations in one place, each on its own tab with its formula written out:
- ROI: what an investment returned, as a percentage, plus the annualised (compound yearly) rate when you give a duration.
- Break-even: how many units, and how much revenue, cover your fixed costs, with an optional target profit, profit at an expected volume, margin of safety and a chart.
- Margin vs markup: the same profit expressed both ways, from cost and price or from a cost and a percentage.
- Contribution margin: from total revenue, variable and fixed costs.
- Payback period: how long until the cash coming in repays the investment, with even or uneven cash flows and an optional discount rate.
All arithmetic is exact (fractions, not floating point), so 0.1 + 0.2 is 0.3 and nothing is rounded until it is shown. Pick a currency symbol if you want one; the numbers are the same in any currency. Everything runs on this page.
ROI and annualised ROI
ROI = (final value − amount invested) ÷ amount invested. 10,000 that becomes 12,500 is a 2,500 gain and an ROI of 25%. Over two years that is not 12.5% a year compounded: the compound (annualised) rate is (12,500 ÷ 10,000)^(1 ÷ 2) − 1 = 11.80%, because the second year's growth builds on the first. The tool shows both, the simple "ROI per year" and the annualised rate, so you can compare an investment with a savings rate fairly. The annualised figure needs a fractional power, so it is the one number computed in double precision (about 15 significant digits). For the growth of a regular saving, use the compound interest calculator.
Break-even and contribution margin
Each unit you sell earns its contribution margin: price − variable cost. With a price of 20 and a variable cost of 12, every unit contributes 8 toward fixed costs; the contribution margin ratio is 8 ÷ 20 = 40%. Fixed costs of 30,000 are covered after 30,000 ÷ 8 = 3,750 units, or 30,000 ÷ 40% = 75,000 of revenue. A target profit of 10,000 needs (30,000 + 10,000) ÷ 8 = 5,000 units.
When the answer is not a whole number, the tool shows the exact figure and rounds up: with fixed costs of 10,000 and a margin of 3 per unit, break-even is 3,333.33 units, so you need to sell 3,334. At an expected volume it also shows profit, the margin of safety (how far sales can fall before a loss: at 5,000 units in the example, 25%) and operating leverage (contribution ÷ profit: 4, so a 1% change in sales moves profit about 4%). The chart draws revenue (solid), total cost (dashed) and fixed costs (dotted); they cross at the break-even point.
Margin vs markup
Both describe the same profit, divided by different things. Margin = profit ÷ price; markup = profit ÷ cost. Something that costs 60 and sells for 100 has a 40% margin and a 66.67% markup. Confusing them is expensive: adding a 40% markup to a cost of 60 gives a price of 84 and a margin of only 28.6%. To convert, markup = margin ÷ (1 − margin) and margin = markup ÷ (1 + markup). The tab works from cost and price, cost and margin, cost and markup, or price and margin. For percentages in general there is the percentage calculator, and for prices with VAT the VAT calculator.
Payback period
Payback = the number of periods until the cumulative cash coming in equals the investment, with the last period counted proportionally. 10,000 repaid at 3,000 a year takes 3 years and 4 months. With uneven flows of 3,000, 4,000 and 5,000, 3,000 is still missing after year 2, and year 3 brings 5,000, so payback is 2 + 3,000 ÷ 5,000 = 2.6 years. Add a discount rate and each future amount is divided by (1 + rate)^period first (discounted payback): at 10%, the same project with a fourth year of 2,000 pays back after 3.154 years. Payback ignores everything after the recovery point, so use it as a risk measure next to ROI, not instead of it.
These calculations show the arithmetic of your own numbers; they are not financial advice. The traps behind each figure are explained in ROI vs break-even vs payback.
