Profit and loss formulas
| Term | Formula |
|---|---|
| Profit (when SP > CP) | SP − CP |
| Loss (when CP > SP) | CP − SP |
| Profit % | Profit ÷ CP × 100 |
| Loss % | Loss ÷ CP × 100 |
| Selling price for a profit % | CP × (1 + Profit % ÷ 100) |
| Cost price from SP and profit % | SP ÷ (1 + Profit % ÷ 100) |
CP is the cost price (what you paid) and SP the selling price (what you sold for). Profit and loss percentages are always calculated on the cost price.
Example: bought for ₹800, sold for ₹1,000 → profit ₹200, profit % = 200 ÷ 800 × 100 = 25%.
Margin vs markup
Businesses often talk about margin instead of profit %. Both use the same profit, but divide by different numbers:
- Markup = Profit ÷ Cost price × 100 — the same as profit %. ₹200 on ₹800 = 25%.
- Margin = Profit ÷ Selling price × 100. ₹200 on ₹1,000 = 20%.
A 25% markup is only a 20% margin. If you want a 20% margin on a ₹800 item, the selling price is 800 ÷ (1 − 0.20) = ₹1,000. The calculator's “Selling price” mode handles both.
| Markup | Equivalent margin |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20% |
| 50% | 33.3% |
| 100% | 50% |
Common exam questions
- Successive profit/loss: selling at x% profit then y% loss changes the price by (x − y − xy ÷ 100)%.
- Same SP, one at x% profit and one at x% loss: there is always an overall loss of (x² ÷ 100)%. At 20% each, the loss is 4%.
- Dishonest dealer: using a 900 g weight for 1 kg gives a profit of 100 ÷ 900 × 100 = 11.11%.
- Discount and markup: marking up 40% and giving 20% off yields 1.4 × 0.8 = 1.12, a 12% profit.
Break-even point
A business breaks even when total revenue equals total cost — no profit, no loss. If each unit sells for ₹1,000, costs ₹800 to make, and you have ₹40,000 of fixed costs a month (rent, salaries), you need to sell 40,000 ÷ (1,000 − 800) = 200 units a month to break even.
Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit)
Profit percentage examples
| Cost price | Selling price | Profit / loss | Profit % | Margin |
|---|---|---|---|---|
| ₹800 | ₹1,000 | ₹200 profit | 25% | 20% |
| ₹500 | ₹650 | ₹150 profit | 30% | 23.1% |
| ₹1,200 | ₹1,500 | ₹300 profit | 25% | 20% |
| ₹1,000 | ₹900 | ₹100 loss | −10% | −11.1% |
Frequently asked questions
How is profit percentage calculated?
Profit % = (Selling price − Cost price) ÷ Cost price × 100. Bought at ₹800 and sold at ₹1,000: 200 ÷ 800 × 100 = 25%.
What is the difference between margin and markup?
Markup divides the profit by the cost price; margin divides it by the selling price. ₹200 profit on an ₹800 cost and ₹1,000 price is a 25% markup but a 20% margin.
How do I find the selling price for a 30% profit?
Multiply the cost by 1.30. For a ₹500 cost: ₹650.
Is profit percentage calculated on cost price or selling price?
On cost price — that is the convention in Indian textbooks and exams. Margin, used in business, is on selling price.
How do I calculate loss percentage?
Loss % = (Cost price − Selling price) ÷ Cost price × 100. Bought at ₹1,000 and sold at ₹900, the loss is ₹100, or 10%.