Business reference library

Business formulas, explained clearly

Learn what each formula measures, how to calculate it by hand, what the result means, and which assumptions matter before you make a decision.

Six essential metrics

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Each reference includes variable definitions, a worked example, interpretation guidance, and a direct path to the matching calculator.

Pricing & Profit

Calculate the percentage of selling price that remains after subtracting cost.

Profit margin (%) = (Selling price − Cost) ÷ Selling price × 100

Pricing & Profit

Calculate how much selling price exceeds cost, expressed as a percentage of cost.

Markup (%) = (Selling price − Cost) ÷ Cost × 100

Pricing & Profit

Find the sales volume needed for contribution to cover fixed costs.

Break-even units = Fixed costs ÷ (Selling price per unit − Variable cost per unit)

Marketing

Measure attributed revenue generated for each dollar of advertising spend.

ROAS = Revenue from ads ÷ Ad spend

Marketing

Calculate the average customer acquisition spend required to acquire one new customer.

CAC = Customer acquisition spend ÷ New customers acquired

Marketing

Estimate the revenue expected from a customer over the relationship.

Revenue LTV = Average purchase value × Purchases per year × Customer lifespan