Understanding Profit and Loss in Percentages

What Are Profit and Loss?

In business, profit and loss are measures of financial gain or loss. They are often expressed as percentages to easily compare different transactions.

• Profit occurs when the selling price of an item is greater than its cost price.
• Loss occurs when the selling price of an item is less than its cost price.

Calculating Profit and Loss

To calculate profit or loss as a percentage, use the following formulas:

• Profit Percentage: $\text{Profit \%} = \left( \frac{\text{Profit}}{\text{Cost Price}} \right) \times 100$
• Loss Percentage: $\text{Loss \%} = \left( \frac{\text{Loss}}{\text{Cost Price}} \right) \times 100$

Where:

• Profit = Selling Price - Cost Price
• Loss = Cost Price - Selling Price

Examples

Example 1: Calculating Profit Percentage

A trader buys a bicycle for ₦15,000 and sells it for ₦18,000. What is the profit percentage?

Example 2: Calculating Loss Percentage

A shopkeeper buys a watch for ₦10,000 and sells it for ₦9,000. What is the loss percentage?