1. What is Profit/Loss Percentage?

The profit/loss percentage measures the relative profit or loss made on a transaction compared to the original cost. It's a key metric in business and finance to evaluate performance.

2. How Does the Calculator Work?

The calculator uses the profit/loss percentage formula:

Where:

• \( Selling\ Price \) — Final sale price of the item
• \( Cost\ Price \) — Original purchase price of the item

Explanation: Positive result indicates profit percentage, negative result indicates loss percentage.

3. Importance of Profit/Loss Calculation

Details: Understanding profit/loss percentage helps businesses evaluate pricing strategies, assess financial performance, and make informed decisions.

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 valid calculation.

5. Frequently Asked Questions (FAQ)

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

Q2: How is this different from markup percentage?
A: Markup is calculated as (Selling Price - Cost Price)/Cost Price, but profit percentage shows the relative gain or loss.

Q3: Can the result be negative?
A: Yes, negative percentage indicates a loss on the transaction.

Q4: What if my cost price is zero?
A: The calculation becomes undefined (division by zero). Cost price must be greater than zero.

Q5: Does this account for additional expenses?
A: No, this is a basic calculation. For net profit, you'd need to factor in all expenses.