Which business calculator should I use?
- Pricing and profit. Set prices with the markup calculator, check what you keep with the profit margin calculator, and find the sales you need with the break-even calculator.
- Judging an investment. The NPV, IRR and payback period calculators answer three versions of the same question: is this project worth the money? Use the WACC calculator to find a discount rate.
- Cash and borrowing. Check short-term health with the working capital calculator and the real cost of funding with the business loan calculator.
- Property. The cap rate calculator measures a rental's return before financing, and the DSCR calculator shows whether its income covers the loan.
Use more than one measure
No single number tells the whole story. A project can pay back quickly and still add little value, or show a high IRR on a small amount of money. Lenders and investors read several measures side by side for that reason. Benchmarks also vary widely by industry, so compare your results with businesses like yours rather than with a general rule.
Frequently asked questions
What is the difference between margin and markup?
Both describe the same profit from two angles. Markup is profit as a share of cost. Margin is profit as a share of the selling price. A 50% markup gives a 33.3% margin, so mixing them up leads to underpricing.
Should I trust NPV or IRR?
When they disagree, NPV is usually the safer guide because it measures value added in money terms at your own cost of capital. IRR is useful for a quick comparison but can mislead for projects of different size or timing.
What discount rate should I use?
Many businesses use their weighted average cost of capital, then add a margin for riskier projects. If you do not have one, test a range of rates and see how sensitive the result is.