# Profit Calculator – Introduction

## What is meant by profit?

When it comes to profit especially in accounting then in simple words, profit means that it is the income which is distributed to the said owner that too in the form of a profitable market production process or in other words it can be the business. One can also say that profit can be stated to be a measure of profitability which in turn happens to be an owner’s income formation process of the market production or simply the business.

## Profit Calculator

 Total income: Net sales: Total expenses: Profit Margin: Profit:

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In addition to the above stated terms, profit is also said to be one of the those main sources of the economic well – being as thanks to this profit there is not only a rise in income but also there can be a rise in the opportunities when it comes to developing the production. Hence words such as the earnings or profit or the income turn out to have similar meanings when it comes to profit calculator. Furthermore, in order to gain more profit, one can say that there should be an improvement in the quality along with the price being balanced especially when the commodities are in question.

Due to this, there is an increase in the income & one will be able to witness that the market turns out to be more efficient than ever. An individual can also say that when there is a rise in economic well – being, it is due to the simple fact of the growth in the income which is again because of the efficient market production. Thus, we are witnessing a chain of events & that is another reason of this profit in any field for that matter.

## Profit margin

There is yet another term which is related to the profit calculator & it is the profit margin which can be stated to be another category of the profitability ratios apart from this being calculated as the net income which is further divided by the revenue. Or in other words, the net profits can be stated to be divided by the sales.

Another aspect of this is that the net profit or the net income can be determined simply by subtracting 1 company’s expenses (these expenses include the material costs, operating costs, tax costs etc) from the total revenue. The 3rd aspect is that these profit margins are usually expressed in the form of a percentage. Therefore, it becomes very easy for all the individuals to understand as to how much is the profit.

### What is the formula used in a profit calculator?

Generally the formulae that are used in a profit calculator have been listed below –

$$profit\, margin\, =\, \frac {net\,\, \, \ income}{net\, \, \, \, sales\, (\,or \,\, \, \, \ the\,\, \, \, \, \, revenue\,)}$$

$$profit\,=\, total \,income\, -\, total\, expenses$$

## How to use a profit calculator?

To make use of the profit calculator, the user would be required to enter the values in the fields provided & the values which are required to calculate the profit are revenue or the price & the gross margin. Later on click on calculate tab to know the result as to how much is the profit.