Calculate your Profit
Calculate your business profitability with precision. Input your revenue and costs to get instant insights into your profit margins and financial performance.
What is
Profit Analysis?
From Shopify to Smartify
What is
Profit Analysis?
Profit analysis is the process of systematically tracking your revenue, calculating product-related costs, and accounting for all business expenses like advertising and operations to determine your actual net profit. It is the lifeblood of every sustainable business decision, showing exactly where your profits are leaking and where you should invest to grow sustainably.
Profit analysis is the process of systematically tracking your revenue, calculating product-related costs, and accounting for all business expenses like advertising and operations to determine your actual net profit. It is the lifeblood of every sustainable business decision, showing exactly where your profits are leaking and where you should invest to grow sustainably.
Profit analysis is the process of systematically tracking your revenue, calculating product-related costs, and accounting for all business expenses like advertising and operations to determine your actual net profit. It is the lifeblood of every sustainable business decision, showing exactly where your profits are leaking and where you should invest to grow sustainably.
Why Profit Analysis?
Create Customer
Journeys That Delight
To understand the financial health of your business.
To know if you're making more money than you spend.
Spot what’s draining your profits and cut what’s not working.
Know how much you can invest to increase ad spend and purchase inventory
Identify profit trends over time to make data-backed decisions for growth
Focus your spend on what’s driving profit so you can scale with confidence.
How to Use Profit Analysis?
Boost Retention and Maximize LTV with
Advanced Retention Cohorts
Boost Retention and Maximize
LTV with Advanced Retention Cohorts
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To get a precise breakdown of your profits and costs, you need to know how much impact each cost item has on your revenue. To understand this, you must first list each cost item, e.g., your COGS, shipping and handling costs, advertising expenses, transaction fees, refunds, discounts, and operating costs.
To get a precise breakdown of your profits and costs, you need to know how much impact each cost item has on your revenue. To understand this, you must first list each cost item, e.g., your COGS, shipping and handling costs, advertising expenses, transaction fees, refunds, discounts, and operating costs.
To get a precise breakdown of your profits and costs, you need to know how much impact each cost item has on your revenue. To understand this, you must first list each cost item, e.g., your COGS, shipping and handling costs, advertising expenses, transaction fees, refunds, discounts, and operating costs.
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Then you need to determine the percentage of your revenue that each cost item takes up. For example, if your revenue is ₹10,000 and ad spend is ₹2,000,
(2000 ÷ 10000) × 100 = 20% of your revenue is going toward advertising.
Then you need to determine the percentage of your revenue that each cost item takes up. For example, if your revenue is ₹10,000 and ad spend is ₹2,000,
(2000 ÷ 10000) × 100 = 20% of your revenue is going toward advertising.
Then you need to determine the percentage of your revenue that each cost item takes up. For example, if your revenue is ₹10,000 and ad spend is ₹2,000,
(2000 ÷ 10000) × 100 = 20% of your revenue is going toward advertising.
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Similarly, calculate the percentage for the other cost items mentioned above. Now, analyse your profit trend over a certain period of time to know if your net profit is growing or declining. These insights will help you assess if any cost is too high and adjust prices or expenses accordingly to protect your profit margins.
Similarly, calculate the percentage for the other cost items mentioned above. Now, analyse your profit trend over a certain period of time to know if your net profit is growing or declining. These insights will help you assess if any cost is too high and adjust prices or expenses accordingly to protect your profit margins.
Similarly, calculate the percentage for the other cost items mentioned above. Now, analyse your profit trend over a certain period of time to know if your net profit is growing or declining. These insights will help you assess if any cost is too high and adjust prices or expenses accordingly to protect your profit margins.
Gross Profit and Gross Margin
Gross Profit and
Gross Margin
Gross Profit measures how much profit your company makes after deducting variable costs directly associated with producing and selling a product, such as product cost, refunds, discounts, transaction fees, and shipping and handling costs.
Gross
Margin
=
Net
Revenue
-
Total Variable
Costs
Gross profit margin shows the percentage of revenue you keep from each sale after deducting the variable costs.
Gross
Profit Margin
=
(Gross Profit / Net Revenue)
*
100
Gross Profit measures how much profit your company makes after deducting variable costs directly associated with producing and selling a product, such as product cost, refunds, discounts, transaction fees, and shipping and handling costs.
Gross
Margin
=
Net
Revenue
-
Total Variable
Costs
Gross profit margin shows the percentage of revenue you keep from each sale after deducting the variable costs.
Gross
Profit Margin
=
(Gross Profit / Net Revenue)
*
100
Contribution
Margin
Contribution Margin
Contribution
Margin
Contribution Margin shows how much of your revenue is available after deducting advertising expenses from your gross profit, so you know what’s left to spend on operating costs like rent, utilities, insurance, salaries, and subscriptions.
Contribution Margin shows how much of your revenue is available after deducting advertising expenses from your gross profit, so you know what’s left to spend on operating costs like rent, utilities, insurance, salaries, and subscriptions.
Contribution Margin shows how much of your revenue is available after deducting advertising expenses from your gross profit, so you know what’s left to spend on operating costs like rent, utilities, insurance, salaries, and subscriptions.
Contribution Margin =
Revenue - COGS - Ad Spend
Contribution Margin =
Revenue - COGS - Ad Spend
BEROAS =
Selling price ÷ (Selling Price – COGS)
BEROAS =
Selling price ÷ (Selling Price – COGS)
Breakeven
ROAS (BEROAS)
Breakeven ROAS (BEROAS)
Breakeven
ROAS (BEROAS)
Break-Even ROAS (BEROAS) is the minimum amount of revenue you need to generate for every ₹1 spent on ads, so you’re neither making a profit nor a loss, but just breaking even on the product. Anything above this target is profitable.
Break-Even ROAS (BEROAS) is the minimum amount of revenue you need to generate for every ₹1 spent on ads, so you’re neither making a profit nor a loss, but just breaking even on the product. Anything above this target is profitable.
Break-Even ROAS (BEROAS) is the minimum amount of revenue you need to generate for every ₹1 spent on ads, so you’re neither making a profit nor a loss, but just breaking even on the product. Anything above this target is profitable.
Net Profit and Net Margin
Net profit is the amount of revenue your business retains after deducting total expenses from total revenue for a given period.
Net Profit =
Revenue - COGS - Ad Spend - Operating Expenses
Net profit Margin is the percentage of revenue you get to keep after all the expenses. It indicates a company’s financial position and helps guide decisions for future growth.
Net
Profit Margin
=
(Net Profit ÷ Revenue)
*
100
Net profit is the amount of revenue your business retains after deducting total expenses from total revenue for a given period.
Net Profit =
Revenue - COGS - Ad Spend - Operating Expenses
Net profit Margin is the percentage of revenue you get to keep after all the expenses. It indicates a company’s financial position and helps guide decisions for future growth.
