Profit & Loss Calculator

What is Profit and Loss?

Profit and loss are fundamental concepts in business and everyday transactions. Profit occurs when the selling price of a product or service exceeds its cost price. Loss occurs when the cost price is higher than the selling price. Understanding profit and loss helps businesses evaluate performance, set pricing strategies, and make informed financial decisions.

Profit and Loss Formulas

The basic formulas are:

Profit = Selling Price − Cost Price (when SP > CP)

Loss = Cost Price − Selling Price (when CP > SP)

Profit % = (Profit / Cost Price) × 100

Loss % = (Loss / Cost Price) × 100

How to Use This Calculator

1. Enter the cost price (the amount you paid or spent to acquire the item).

2. Enter the selling price (the amount at which you sold or plan to sell the item).

3. Click "Calculate Profit / Loss" to see the profit or loss amount and percentage.

Markup vs Margin

Markup is the percentage added to the cost price to arrive at the selling price. It is calculated as (Profit / Cost Price) × 100. Margin (also called profit margin) is the percentage of the selling price that is profit. It is calculated as (Profit / Selling Price) × 100. For example, if CP is ₹100 and SP is ₹150, the markup is 50% but the margin is 33.33%.

Frequently Asked Questions

What if the cost price and selling price are equal?

When the cost price equals the selling price, there is neither profit nor loss. This is called the break-even point. The profit/loss amount and percentage both equal zero.

How is profit percentage calculated in competitive exams?

In Indian competitive exams (SSC, Banking, UPSC), profit and loss percentage is always calculated on the cost price unless stated otherwise. This is the standard convention: Profit% = (Profit / CP) × 100.

What are overhead expenses in profit and loss?

Overhead expenses include transportation, storage, taxes, and other costs incurred beyond the purchase price. When calculating actual profit or loss, these expenses should be added to the cost price before comparing with the selling price.