# Profit Goal Calculator

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## This tool will calculate the prices required to reach the target profit.

Our profit goal calculator will let you determine the prices required to reach your target profit. Thanks to this tool, you can better optimize your sales or prepare for the price negotiation with your supplier.

The calculator has two main options:

### Calculate the required selling price to reach the target profit

By selecting this option, you will determine the target selling price you need to ask your customer(s) in order to reach your profit goal.

### Calculate the required purchase price to reach the target profit

If you wish to determine the price of goods sold, select this option. The tool will calculate the maximum purchase price you could accept to achieve your profit goal.

## How to calculate the price needed to reach the profit goal?

Although calculator usage is pretty straightforward, you must understand all the fields correctly to prevent any misinterpretations of the results.

## Description of fields

#### Target profit

The amount of gross profit you plan to make from the transaction. The key to understanding here is that it is a gross profit, so essentially the difference between the transaction amount and costs of goods sold.

#### Purchase price

The price you pay your supplier for the products being sold or the full cost of manufacturing if you are the producer. The price in the form should represent the cost of one item.

#### Selling price

The price your customer pays you for one item of product. For example, the retail price of a product.

#### Units Sold

The number of items you plan to sell.

## Other useful tools

If you wish to maximize your profits, try out our other tools. For better decision-making, try out our profit calculator to evaluate the profitability of potential transactions. If you plan to optimize your profits, use our margin or markup calculator. It will help you build a better pricing policy.

You may find our monthly recurring revenue calculator particularly useful if you offer subscription plans to your customers.

If you are just starting a new venture, you may find the break-even point and margin of safety calculators particularly useful.

### Authors

Created by Lucas Krysiak on 2022-07-13 17:51:03 | Last review by Mike Kozminsky on 2023-11-01 13:10:14