# Profit and Loss Formulas: Percentage, Examples, FAQs | TaxGst

Profit or Loss these terms are very often used in our daily lives. These are the terms used to identify if a deal made is profitable or not.

In simple terms, if the **selling price(SP) is greater than the cost price(CP)**, we gain a **profit**. If the **selling price(SP) is less than the cost price(CP), **then we have a** loss**.

**Cost Price:** The price at which we buy the product. **Selling Price:** The price at which we sell the product

Now let us look into profit and loss formulas and how to calculate them

**Profit**

The additional amount gained by selling a purchased product at a higher rate than Cost Price is called profit.

Following is the profit formula:

Profit(P) = Selling Price(SP) – Cost Price(CP)

And profit percentage can be calculated as:

Profit% (P%)= (Profit/Cost Price) x 100

**Loss**

The amount incurred after selling the purchased product at a lower rate than Cost Price is Loss.

Following is the loss formula:

Loss(L)= Cost Price(CP) – Selling Price(SP)

And loss percentage can be calculated as follows:

Loss% (L%) = (Loss/Cost Price) x 100

**Important Profit and Loss Formula**s

- Profit(P) = SP – CP
- Profit%(P%) = \(\frac{P}{CP} \cdot 100\)
- Loss(L) = CP – SP
- Loss%(L%) = \(\frac{L}{CP} \cdot 100\)
- Selling Price(SP) = \(\frac{100 + P \%}{100} \cdot CP\)
- Selling Price(SP) = \(\frac{100 – L \%}{100} \cdot CP\)
- Selling Price(SP) = Marked Price – Discount
- Cost Price(CP) = \(\frac{100}{100 + P \%} \cdot SP\)
- Cost Price(CP) = \(\frac{100}{100 – L \%} \cdot CP\)

**Examples**

**Q. If a shopkeeper buys sugar 1kg for 50inr and sells for 55inr, calculate the profit and profit%**

Sol CP = 50inr

SP = 55inr

Profit = SP – CP = 55 – 50 = 5inr

Profit% = \(\frac{P}{CP} \cdot 100\)

= \frac{5}{50} \cdot 100

= 10%.

**Q.** **What is the book’s market price if a book costs 100inr after a 10% discount?**

**Sol.** SP = 100

Discount = 10%

SP = MP -D

Discount(D) % = \(\frac{D}{MP} \cdot 100\)

On Rearranging the terms, we get

D = \(\frac{D% \codt MP}{100}\)

Now using these in the SP formula for D

\(SP = MP – \frac{D% \cdot MP}{100}\)

\(SP = MP \cdot \frac{100 – D%}{100}\)

\(MP = \frac{SP \cdot 100}{100 – D%}\)

\(MP = \frac{100 \cdot 100}{100 – 10}\)

\(MP = \frac{1000}{9}\)

\(MP = 111.11 INR\)

**FAQs**

**What is the Profit formula?**Profit(P) = Selling Price(SP) – Cost Price(CP)

**What is a formula for Loss?**Loss(L) = Cost price(CP) – Selling Price(SP)

**What is the formula for Discount?**Discount (D) = Market Price(MP) – Selling Price(SP)

**What is profit%?**\(\)Profit%(P%) = \frac{P}{CP} \codt 100[\latex]

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