Profit Formula

Profit formula

Profit is the benefit earned by selling a particular product or service. This formula is used in business to know the gain. Profit is gained only when the selling price is greater than the cost price. If the selling price is lower, the loss occurred. Profit is obtained by subtracting the cost price from the selling price.

Profit can be also termed as income minus expenditure. The selling price is the value a consumer pays for the product or service. The customer pays the value for ownership of the product.it is higher than the cost price which includes a certain amount. Cost price can be said as the original price of the product. It is the inevitable factor in deciding profit percentage or amount.

PROFIT = SP-CP

Where, SP = Selling price

            CP = Cost price

The formula to find the profit percentage is

Profit percentage= Profit × 100 ÷ CP

Where, CP is the cost price 

Examples:

1. A merchant buys a pair of sandals at 200$ and sells it to a customer at 349$.

Given data, CP=200 and SP=349

To find the profit we will put values in the formula

Profit= SP – CP

         =349 – 200

         =149$

Finding out the Profit percentage on the obtained value   

Profit percentage= Profit * CP ÷ 100

                            = 149 * 200 ÷ 100

                            = 298%

2. On selling furniture of 489$, A earned 7% profit. Find out the cost price of furniture? 

Given data, SP= 489$ and 7% profit percentage

Assume the CP is 100, then the SP would be 107. So let’s find out in the case of 489$

CP= 489*100÷107

      = 457$

The  CP of furniture is 457$

Important formulas: