Business Budget Calculator

Build a monthly business budget from revenue, cost of goods sold, and fixed operating expenses to see gross profit, operating profit, after-tax net profit, and the break-even revenue point.

Quick Facts

Formula
Gross Profit = Revenue - COGS
Operating profit subtracts fixed expenses from gross profit; net profit subtracts tax on any positive operating profit.
Break-even
Fixed Costs / Gross Margin Ratio
The revenue level where gross profit exactly covers fixed operating expenses.

Your Results

Calculated
Gross profit
-
Revenue minus cost of goods sold
Operating profit (EBIT)
-
Gross profit minus fixed operating expenses
Net profit (after tax)
-
Operating profit minus tax owed
Break-even revenue
-
Revenue needed for gross profit to cover fixed costs

Ready

Enter revenue, cost ratio, fixed expenses, and tax rate, then press Calculate.

How the Business Budget Calculator works

This tool builds a simple operating budget for a month of business activity using standard cost-volume-profit (CVP) accounting — the same layered logic found in an income statement, run in reverse from revenue down to after-tax profit. Enter monthly revenue, the share of revenue consumed by cost of goods sold (COGS), fixed operating expenses, and a tax rate, and it walks through gross profit, operating profit, and net profit, plus the break-even revenue your fixed costs require.

The formulas

Four steps, each building on the last:

  • Gross profit = Revenue − (Revenue × COGS%). COGS% represents variable costs that scale with sales — materials, direct labor, payment processing fees, and similar per-unit costs.
  • Operating profit (EBIT) = Gross profit − Fixed operating expenses. Fixed expenses are the rent, salaries, insurance, and software costs that do not change with sales volume.
  • Net profit = Operating profit − (Operating profit × Tax rate). Tax is only applied when operating profit is positive; a loss is not taxed in this model.
  • Break-even revenue = Fixed operating expenses ÷ Gross margin ratio, where the gross margin ratio is gross profit divided by revenue. This is the revenue level at which gross profit exactly offsets fixed costs, leaving zero operating profit.

Worked example

With $50,000 in monthly revenue, COGS at 40% of revenue, $15,000 in fixed expenses, and a 21% tax rate: COGS is $20,000, so gross profit is $30,000 (60% gross margin). Subtracting the $15,000 of fixed expenses leaves an operating profit of $15,000 (30% operating margin). Tax at 21% of that is $3,150, leaving a net profit of $11,850 (23.7% net margin). Break-even revenue is $15,000 ÷ 0.60 = $25,000 — half of current revenue, meaning the business currently operates well above its break-even point.

What moves the result most

  • Cost of goods sold %: since COGS scales with every revenue dollar, a small change in this percentage shifts both gross profit and the break-even point more than an equivalent dollar change in fixed costs.
  • Fixed operating expenses: these subtract directly from operating profit and set the numerator of the break-even formula — cutting fixed costs lowers the revenue needed to break even.
  • Tax rate: only affects the gap between operating profit and net profit; it has no effect on break-even revenue, which is calculated before tax.

What this budget does not include

This is an operating budget only. It excludes one-time capital purchases (equipment, buildout), loan principal repayments, interest expense, depreciation, and non-operating income — all of which affect cash flow and taxable income but sit outside a standard gross-profit-to-net-profit walk. Businesses with debt service or major capital spending should budget those items separately alongside this output. Nothing here is personalized tax or financial advice; consult an accountant for entity-specific tax treatment.

Frequently Asked Questions

What formula does this business budget calculator use?
It applies standard cost-volume-profit budgeting: Gross Profit = Revenue − (Revenue × COGS%), Operating Profit = Gross Profit − Fixed Operating Expenses, and Net Profit = Operating Profit − (Operating Profit × Tax Rate), with tax applied only when operating profit is positive.
How is the break-even revenue calculated?
Break-even revenue = Fixed Operating Expenses ÷ Gross Margin Ratio, where the gross margin ratio is gross profit divided by revenue. This is the revenue level at which gross profit exactly covers fixed costs, leaving zero operating profit.
What happens if cost of goods sold is 100% or more of revenue?
When cost of goods sold consumes all or more of each revenue dollar, gross margin is zero or negative and there is no achievable break-even point. Increasing revenue alone cannot cover fixed costs in that case; variable costs need to come down first.
Does this budget include loan payments or one-time costs?
No. The model covers recurring operating budgeting only: revenue, cost of goods sold, fixed operating expenses, and tax on operating profit. It excludes one-time capital purchases, loan principal repayments, and interest expense, which should be budgeted separately.

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