100,000 is the example result. Read it using the units and relationship stated below.
Target Profit uses target profit, profit margin.
Protecting contribution before accepting a price
For target profit, the relationship is Result = (([Target profit]) ÷ ([Profit margin] ÷ 100)). The amount depends on the supplied target profit, profit margin, rather than a live market price or a value imported from another record. A quote can meet a revenue target and still leave too little to cover delivery. Separate the selling-price denominator from the cost denominator: margin and markup answer different questions. A discount changes contribution even when the supplier cost stays fixed.
Source and result record
For target profit, retain Target profit, Profit margin together with the output. Record the date of the source values and the unit convention used in the form. That record separates a change in the underlying case from a change in how the information was entered. A saved result without its source values cannot show which assumption produced it.
Example with the supplied inputs
Target profit: 20000; Profit margin: 20. Result: 100,000. The values are illustrative.
Compare one changed input
Target profit changes from 20000 to 22000. The result becomes 110,000. All other inputs remain fixed.
Calculation rule
Result = (([Target profit]) ÷ ([Profit margin] ÷ 100))
Inputs and output
| Input | Example value | Entry convention |
|---|---|---|
| Target profit | 20000 | Use target profit on the currency and period basis shown by the formula. Keep gross amounts, net amounts and unit amounts distinct; the page does not fetch a price or exchange rate. |
| Profit margin | 20 | Use profit margin on the currency and period basis shown by the formula. Keep gross amounts, net amounts and unit amounts distinct; the page does not fetch a price or exchange rate. |
Output: 100,000 is the example result. Read it using the units and relationship stated below. Use the formula to distinguish a cash amount, count, percentage or ratio.
How to use the page
Collect the inputs
Gather Target profit, Profit margin. Use one period and the units shown in the form.
Run the calculation
Enter the values and select the action. The calculation rule above explains how the inputs produce the result.
Compare a scenario
Change Target profit on its own, keeping the other inputs fixed. Read both results before changing another assumption.
Worked example
With the example inputs listed above, the result is 100,000.
Change Target profit from 20000 to 22000 while keeping every other value fixed. The result becomes 110,000. This comparison isolates that input; it does not forecast how other variables will respond.
Check the stated formula, units and limits before using the result in a decision.
Keep the displayed formula, input units and model scope with the result. Corrections or questions can be sent through the request section on this page.
Content updated: October 11, 2026