Calculate Profit and Profit Percent using Profit formula. Easily calculate the profit gained for a product by selling it. All the business or financial transactions are used the profit formula. The profit is calculated when the selling price of any product sold is greater than the cost price. Check out how the profit is calculated and know the profit gained by your business. We have included solved problems along with explanations.
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Formulas to Calculate Profit
If the selling price is more than the cost price (S.P. > C.P.), there is a profit. Various formulas to calculate profit are given below. Remember all of them for better learning.
- Formula for Profit Profit = S.P – C.P.
- Formula for Profit Percentage = Profit Percent Formula = (Profit x 100)/C.P.
- Gross Profit Formula = Gross Profit = Revenue – Cost of Goods Sold
- Profit Margin Formula = Profit Margin = (Total Income/Net Sales) x 100
- Gross Profit Margin Formula = Gross Profit Margin = (Gross Profit/Net Sales) x 100
Notation Used in Profit Formula
- S.P. = Selling Price i.e. the cost at which the product is sold
- C.P. = Cost price i.e. the cost at which the product is originally bought
Profit and Profit Percent Examples
Example 1.
Ram purchased 300 calculators at $100 each. He spent $5 on packing each calculator, paid $50 to the carrying for loading, and $500 on transportation. He sold 200 at a rate of $180 each and 100 at the rate of $80 each. Find his profit or loss percent in the whole transportation.
Solution:
Given that Ram purchased 300 calculators at $100 each.
C.P. of 1 calculator = $100
C.P. of 300 calculators = $100 x 300 = $30000
Money spent on packing 1 calculator = $5
Money spent on packing 300 calculators = $300 x 5 = $1500
Overhead expenses = $(1500 + 50 + 500) = $2050
C.P. of 300 calculators = Actual C.P. + Overhead expenses
C.P. of 300 calculators = $30000 + $2050 = $32050
S.P. of 300 calculators = S.P. of 200 calculators + S.P. of 100 calculators
S.P. of 1 calculator = $180
S.P. of 200 calculators = $180 x 200 = $36000
S.P. of 1 calculator = $80
S.P. of 100 calculators = $80 x 100 = $8000
S.P. of 300 calculators = $36000 + $8000 = $44000
S. P. > C. P., there is profit, therefore, profit – S.P. – C.P.
Profit = $44000 – $32050 = $11950
Profit% = P/C.P. x 100%
Profit% = $11950/$32050 x 100%
Profit% = 37.28%
The profit percentage is 37.28%.
Example 2.
A cloth merchant bought 25 shirts, each at a price of Rs 280. He sold each of them for Rs. 300. Find his percentage profit.
Solution:
Given that a cloth merchant bought 25 shirts, each at a price of Rs 280. He sold each of them for Rs. 300.
The profit percentage remains the same for one unit as well for all the units. Thus the calculations should be done for one unit only.
The Cost Price = Rs 280
Selling Price = Rs. 300
Profit = Selling Price – Cost Price
Substitute Selling Price and Cost Price in the above formula.
Profit = Rs. 300 – Rs 280 = Rs 20.
Now, find out the profit percentage formula.
Profit percentage = P/C.P. x 100%
Profit percentage = 100 × 20/280 = 7.14%
Therefore, the profit percentage is 7.14%
Example 3.
A retail fruit vendor buys pineapples at a score of Rs. 200/-, and retails them at a dozen for Rs 156. Did he gain or lose in the transaction and what % was his gain or loss?
Solution:
Given that a retail fruit vendor buys pineapples at a score of Rs 200, and retails them at a dozen for Rs 156.
The cost price = Rs 220
C.P/Pineapple = 200/20 = 10
1 score = 20 nos
S.P = Rs.156/dozen
S.P/Pineapple = 156/12 = 13.
Profit = Rs. 13 – Rs. 10 = Rs. 3.
% Profit = 100 × 3/10 = 30%
Therefore, the profit percentage is 30%
FAQs on Profit and Profit Percent
1. How do I calculate profit percentage?
The profit percentage can be calculated using the below formula.
Formula for Profit Percentage = Profit Percent Formula = (Profit x 100)/C.P.
2. Is profit and profit percent different?
Yes, Profit is the difference between the Selling price and the Cost price when the Selling price is more than the Cost price.
P = SP – CP; SP>CP
Profit percent will obtain by dividing the Profit with Cost price and multiplying the resultant with the 100.
Profit percent = (Profit x 100)/C.P
3. What is the formula of Selling Price?
Selling Price can be found when the Profit Percentage and Cost Price are given is
SP = {(100 + P%)/100} x CP where SP is Selling Price, P% is Profit Percentage, and CP is Cost Price.
4. How to Calculate the Percentage Gain on an Investment?
- In calculating the percentage gain on an investment, first, determine the original cost.
- Next, Subtract the Cost Price from the Selling price of the investment.
- Take the gain from the investment and divide it by the original amount of the investment.
- Finally, multiply the result by 100 to get the percentage change in the investment.