ROI & Break-even Calculator
Compare costs, revenue and payback from your own assumptions.
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Use one consistent currency. A selling price at or below variable cost cannot cover fixed cost.
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What is the ROI & Break-even Calculator?
Return on investment and break-even analysis answer two planning questions: will a venture earn more than it costs, and how many sales does it take to cover those costs. Small businesses use them to price products, makers use them before a production run, and teams use them to compare a proposed project with doing nothing. Both depend on separating fixed costs, which stay the same regardless of volume, from variable costs, which rise with each unit sold.
This calculator takes four non-negative numbers: fixed cost, selling price per unit, variable cost per unit and units sold. It computes revenue as price times units, total cost as fixed cost plus variable cost times units, profit as revenue minus total cost, and ROI as profit divided by total cost. Break-even units are fixed cost divided by the per-unit margin, rounded up to a whole unit. If the price does not exceed the variable cost, no break-even is shown, because each sale would add to the loss.
How to use it
- 1Enter fixed cost, selling price and variable cost per unit.
- 2Enter a projected sales volume.
- 3Compare profit, ROI and break-even units.
How it works
Profit equals revenue minus cost. ROI is profit divided by cost. Break-even units round fixed cost divided by contribution margin per unit upward.
Example
With $1,000 fixed cost and $20 margin per unit, break-even requires 50 units.
Limitations & notes
- The result depends entirely on your inputs and excludes taxes, financing and changing costs.
- This is planning arithmetic, not financial advice.
Frequently asked questions
How do you calculate ROI?
ROI equals net profit divided by the cost of the investment, times 100. In this calculator, cost means total cost: fixed cost plus variable cost for every unit sold. With $1,000 fixed cost, a $50 price, $30 variable cost and 100 units, revenue is $5,000, total cost is $4,000, profit is $1,000 and ROI is 25 percent. A negative ROI means the inputs produce a loss.
What is contribution margin?
Contribution margin is the selling price minus the variable cost per unit: the amount each sale contributes toward fixed costs and then profit. At a $50 price and $30 variable cost, each unit contributes $20. Dividing by the price gives the margin ratio, 40 percent here. Raising the price or cutting variable cost increases the margin and lowers the break-even volume; a margin of zero or less can never cover fixed costs.
What is the difference between break-even point and payback period?
The break-even point is a volume: the number of units at which total revenue equals total cost. The payback period is a length of time: how long cumulative profit takes to repay an upfront investment. If fixed costs are paid upfront, you break even at 50 units, and you sell 10 units a month, payback takes about 5 months. This tool reports units; divide by expected monthly sales to estimate time.
Why does simple ROI ignore timing?
Simple ROI treats a profit earned within one month the same as the same profit earned over five years. A 25 percent return over one year is far better than 25 percent spread over five. For longer projects, annualized ROI, net present value or internal rate of return account for time and the value of money received later. This calculator is best for single-period comparisons with consistent assumptions.
Which costs count as fixed and which as variable?
Fixed costs do not change with output during the period you analyze: tooling, software licenses, rent, a website build or a launch campaign. Variable costs scale with each unit: materials, packaging, shipping, payment processing fees and per-sale commissions. Some costs are mixed, such as utilities; split them or assign them to the category that dominates. Misclassifying a cost changes both the margin and the break-even result.
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