What Each Term Means
Total Revenue: Total Revenue is the total amount of money your business earns from selling goods or services. It is the income you receive before any expenses are deducted. (Example: If you sell 100 products at $20 each, your total revenue would be $2,000.)
Cost of Goods Sold (COGS): Cost of Goods Sold (COGS) represents the direct costs associated with producing or acquiring the products you sell. This includes the costs of raw materials, labor, and any other direct costs tied to product creation. (Example: For a handmade candle business, COGS might include the cost of wax, wicks, fragrances, and labor.)
Fixed Costs: Fixed costs are expenses that do not change with the level of production or sales. These are recurring costs your business must pay regardless of how much or how little you produce. (Example: Rent, salaries, and utilities.)
Variable Costs: Variable costs are expenses that change based on the level of production or sales. The more products or services you sell, the higher your variable costs will be. (Example: Raw materials, shipping costs, and commissions for salespeople.)
Business Profit Margin Calculator
Calculate your profit margin based on revenue and costs
