Profit % and Loss % Formulas with Examples

Profit % Formula:

The profit percentage is a measure of the profitability of a business or investment. It indicates the percentage increase in the initial cost or investment. The formula to calculate profit percentage is:

Profit % = (Profit / Cost Price) × 100

Where,
Profit is the difference between the Selling Price (SP) and Cost Price (CP) of an item.

Example:
Let's consider an example to understand the calculation of profit percentage.
Suppose you purchase a product for $100 and sell it for $150. To find the profit percentage, we will use the formula mentioned above.

Profit = Selling Price - Cost Price
= $150 - $100
= $50

Profit % = (Profit / Cost Price) × 100
= ($50 / $100) × 100
= 50%

Therefore, the profit percentage in this case is 50%.

Loss % Formula:

The loss percentage is calculated when the selling price of a product is less than the cost price, resulting in a loss. The formula to calculate loss percentage is:

Loss % = (Loss / Cost Price) × 100

Where,
Loss is the difference between the Cost Price (CP) and Selling Price (SP) of an item.

Example:
Let's consider an example to understand the calculation of loss percentage.
Suppose you purchase a product for $200 and sell it for $150. To find the loss percentage, we will use the formula mentioned above.

Loss = Cost Price - Selling Price
= $200 - $150
= $50

Loss % = (Loss / Cost Price) × 100
= ($50 / $200) × 100
= 25%

Therefore, the loss percentage in this case is 25%.

Key Points:
- Profit % is calculated when the Selling Price is greater than the Cost Price, resulting in a profit.
- Loss % is calculated when the Selling Price is less than the Cost Price, resulting in a loss.
- The profit percentage formula is (Profit / Cost Price) × 100.
- The loss percentage formula is (Loss / Cost Price) × 100.
- Both profit and loss percentages are expressed as percentages of the Cost Price.
- These formulas are essential in determining the financial performance of a business or investment.
- They help in analyzing the profitability and efficiency of various transactions.
- Profit and loss percentages are commonly used in business, finance, and investment calculations.