1. What is Profit Percentage?

Profit percentage is a financial metric that shows what percentage of the cost price has been gained as profit. It helps in understanding the profitability of a transaction or business.

2. How Does the Calculator Work?

The calculator uses the profit percentage formula:

Where:

• Selling Price — Final price at which goods/services are sold
• Cost Price — Original price of goods/services

Explanation: The formula calculates the profit as a percentage of the cost price, showing how much profit was made relative to the initial investment.

3. Importance of Profit Percentage

Details: Profit percentage is crucial for businesses to evaluate pricing strategies, compare profitability across products, and make informed financial decisions.

4. Using the Calculator

Tips: Enter the selling price and cost price in any currency (both must be in the same currency). Values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a good profit percentage?
A: This varies by industry, but generally 10-20% is considered good for most businesses, while 5-10% might be typical for retail.

Q2: Can profit percentage be negative?
A: Yes, if selling price is less than cost price, it indicates a loss rather than profit.

Q3: How is this different from markup?
A: Markup is calculated on cost price, while profit percentage shows profit relative to cost price.

Q4: Should I include all expenses in cost price?
A: Yes, for accurate calculation, cost price should include all direct and indirect costs.

Q5: How often should I calculate profit percentage?
A: Regular calculation (monthly/quarterly) helps track business performance and make timely adjustments.