The profit formula is used to calculate the profit that has been made by selling a particular product. The formula for profit majorly finds application in business and financial transactions. When the selling price of any product is greater than the cost price (the price at which the product was originally bought), gain or profit is made. Profit and loss as a percentage is generally a measure to depict how much profit or loss a trader gets from any particular deal. Let's learn about the profit formula with a few solved examples in the end.
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Profit Formula for a given cost price and selling price of any article can be expressed as:
Profit = Selling price - Cost price
Profit = S.P. - C.P.
Note: Profit can be calculated when the selling price is greater than the cost price. For a smaller selling price, the value for profit would be negative, which means that the trader has experienced loss in the deal.
Some other important formulas related to profit are: