Profit Formula

About Profit Formula

The profit formula is used to determine how much profit was produced in a transaction. A profit is made when the Selling price of a product exceeds its Cost price. This is the fundamental profit formula, which may be used to calculate the percentage of profit made in a firm or when conducting a financial transaction. The profit formula aids in determining the profit earned from the sale of a specific product, often in a business, or the gain in any financial transaction. When the selling price exceeds the cost price, profit can be determined. As a result, the profit formula is:

Profit = Selling Price (S.P.) - Cost Price (C.P.)

Where,

The product's cost price is the price at which it was originally purchased.

The product's Selling Price is the price at which it was sold.

Profit = Selling Price (S.P.) - Cost Price (C.P.)

It's worth noting that when the selling price is less than the cost price, the transaction is considered a loss.

Different Profit Formulas

Profit is a broad phrase that is applied to both small and large transactions. The basic profit calculation presented above is utilised for small-scale transactions. When businesses do larger transactions, terminology like gross profit and net profit are utilised. These words include total sales, revenue, and a company's overall profit % over time, among others. The following are some key profit formulas:

Name Formulas
Profit Percentage Formula Profit Percentage = (Profit/Cost Price) × 100
Gross Profit Formula Gross Profit = Revenue (Sales) - Cost of Goods Sold
Net Profit Formula Net Profit = Gross profit - Expenses

Profit Percentage Formula

The amount of profit stated in percentages is called profit percentage (%). Because this profit is based on the cost price, the profit percentage is calculated using the formula (Profit/Cost Price) x 100.

Profit = Selling Price -Cost Price

Profit Percentage(%)=Exponential Formula

 

 

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Profit Formula
Profit Formula

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