How to Calculate Profit Percentage

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Profit Percentage Calculator

Quickly calculate your profit margins and markup percentages

Profit Amount $0.00
Profit Percentage 0.00%

Understanding Profit Percentage

Profit percentage is a crucial financial metric used by businesses and entrepreneurs to determine the profitability of a product or service. It represents the ratio of the profit earned to the cost price, expressed as a percentage. Knowing this number helps in pricing strategies, financial forecasting, and competitive analysis.

The Profit Percentage Formula

To calculate the profit percentage, you first need to find the absolute profit and then divide it by the original cost price. The mathematical formula is:

Profit Percentage = ((Selling Price – Cost Price) / Cost Price) × 100

Practical Example

Let's say you buy a vintage camera for $120 (Cost Price) and sell it on an online marketplace for $180 (Selling Price).

  1. Find the Profit: $180 – $120 = $60
  2. Divide Profit by Cost: $60 / $120 = 0.5
  3. Convert to Percentage: 0.5 × 100 = 50%

In this scenario, your profit percentage is 50%.

Markup vs. Margin: What's the Difference?

While often used interchangeably, they represent different perspectives:

  • Markup (Profit Percentage on Cost): This is the percentage calculated above. It shows how much more the selling price is compared to what you paid.
  • Profit Margin: This is calculated by dividing the profit by the Selling Price. Using the example above: ($60 / $180) × 100 = 33.33%. This shows how much of every dollar kept is actually profit.
function calculateProfitResult() { var costPrice = parseFloat(document.getElementById('costPrice').value); var sellingPrice = parseFloat(document.getElementById('sellingPrice').value); var resultArea = document.getElementById('profitResultArea'); var resProfitAmount = document.getElementById('resProfitAmount'); var resProfitPercent = document.getElementById('resProfitPercent'); var marginNote = document.getElementById('marginNote'); if (isNaN(costPrice) || isNaN(sellingPrice)) { alert("Please enter valid numerical values for both Cost and Selling Price."); return; } if (costPrice 0) { resProfitAmount.style.color = "#27ae60"; resProfitPercent.style.color = "#27ae60"; marginNote.innerHTML = "This represents a " + marginPercentage.toFixed(2) + "% Gross Profit Margin."; } else if (profit < 0) { resProfitAmount.style.color = "#e74c3c"; resProfitPercent.style.color = "#e74c3c"; marginNote.innerHTML = "You are currently operating at a loss."; } else { resProfitAmount.style.color = "#2c3e50"; resProfitPercent.style.color = "#2c3e50"; marginNote.innerHTML = "This is a break-even point."; } }

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