1. What is Percentage Profit?

Percentage profit measures how much profit is made relative to the cost price. It shows the efficiency of a business transaction in percentage terms rather than absolute numbers.

2. How Does the Calculator Work?

The calculator uses the percentage profit formula:

Where:

• \( Selling\ Price \) — Final price at which item is sold
• \( Cost\ Price \) — Original price at which item was purchased

Explanation: The formula calculates profit as a percentage of the original cost, showing return on investment.

3. Importance of Profit Calculation

Details: Percentage profit is crucial for business analysis, pricing strategies, and financial planning. It allows comparison across different products and scales.

4. Using the Calculator

Tips: Enter both selling price and cost price in the same currency units. Cost price must be greater than zero for calculation.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between profit and percentage profit?
A: Profit is absolute (e.g., $10), while percentage profit is relative (e.g., 20% of cost price).

Q2: Can percentage profit be negative?
A: Yes, negative percentage profit indicates a loss (when selling price < cost price).

Q3: What's a good percentage profit margin?
A: This varies by industry, but generally 10-20% is considered healthy for most businesses.

Q4: How does this differ from markup percentage?
A: Markup is calculated on cost price, while profit percentage is profit relative to cost price.

Q5: Should I include all expenses in cost price?
A: For accurate calculation, cost price should include all direct costs associated with the product.