Simple profit or loss on the sale of an item is calculated by subtracting the buying price from the sale price.
Changing this into a percentage profit or loss allows you to compare sales.
Is it better to buy a pencil for 5p and sell it for 10p, or to buy a house for
£200 000 and sell it for £210 000?
The answer is debatable, however buying a pencil for 5p and selling it for 10p represents a 100% profit compared to just a 5% profit on the house.
We use these formulae to work out percentage profits or losses.
A bar of chocolate is bought for £1.50 and sold for £1.75. Calculate the percentage profit.
Don't mix your units, so
Actual profit = 25p and starting figure = 150
Actual profit = £0.25 and starting figure = £1.50
Percentage Profit = 16.7 % (3 s.f)