Profit and Loss Calculator

What is profit?

Profit is the financial gain you make when the price you sell something for is higher than the price you paid for it. In trading and business, the price you pay to acquire or produce an item is called the cost price (CP), and the price you sell it for is the selling price (SP). When the selling price is greater than the cost price, the difference is your profit. Profit is the lifeblood of any business — it rewards risk, funds growth and measures how efficiently you turn resources into value. A profit and loss calculator makes it effortless to work out exactly how much you have gained on any sale, whether you are a student learning the concept, a shopkeeper pricing stock or an investor reviewing a trade.

What is loss?

Loss is the opposite of profit. It occurs when the selling price is lower than the cost price, meaning you received less money than you originally spent. Loss can happen for many reasons — falling market prices, spoilage, discounts to clear old stock, or simply mispricing. Understanding loss is just as important as understanding profit, because it tells you when a product, trade or business decision is destroying value rather than creating it. By calculating loss and loss percentage you can quickly see how serious a shortfall is relative to your original investment, and decide whether to adjust pricing, cut costs or change strategy.

Profit formula

The profit formulas used by this calculator are simple and based on cost price:

• Profit = Selling Price (SP) − Cost Price (CP)
• Profit % = (Profit ÷ Cost Price) × 100
• Selling Price = Cost Price × (1 + Profit % ÷ 100)
• Cost Price = Selling Price ÷ (1 + Profit % ÷ 100)

For example, if you buy a product for $200 and sell it for $250, your profit is $250 − $200 = $50. As a percentage, that is (50 ÷ 200) × 100 = 25% profit. These formulas also work in reverse, so you can set a target profit percentage and instantly find the selling price you need to charge.

Loss formula

The loss formulas mirror the profit formulas but apply when the selling price is below the cost price:

• Loss = Cost Price (CP) − Selling Price (SP)
• Loss % = (Loss ÷ Cost Price) × 100
• Selling Price = Cost Price × (1 − Loss % ÷ 100)

For example, if you buy goods for $200 and have to sell them for $150, your loss is $200 − $150 = $50, which is (50 ÷ 200) × 100 = 25% loss. If you know you must take a fixed loss percentage to clear stock, the calculator can also tell you the exact selling price that produces that loss.

Real-life examples

Profit and loss calculations appear everywhere in daily life. A retailer buys a pair of shoes from a wholesaler for $40 and sells them for $60, earning a $20 profit, which is a 50% profit on cost. A reseller buys a second-hand phone for $300, but the market drops and they sell it for $240, taking a $60 loss, or 20%. A baker spends $5 on ingredients to make a cake and sells it for $15 — a $10 profit, or 200% on cost. A stock trader buys shares worth $1,000 and sells them at $1,150, locking in a $150 profit (15%). In every case, the same cost price and selling price relationship determines whether the transaction made money or lost it, and this calculator handles all of them instantly.

Business use cases

For businesses, profit and loss calculations are central to pricing, inventory and strategy. Shop owners use them to set selling prices that hit target margins, ensuring each sale covers costs and contributes to overheads. Wholesalers and manufacturers compare profit percentages across products to decide which lines to promote or discontinue. E-commerce sellers factor in product cost, shipping and fees to confirm they are still profitable after marketplace commissions. During sales and clearance events, retailers deliberately calculate loss percentages to know how deep a discount they can afford. Accountants and entrepreneurs roll these per-item figures up into a full profit and loss statement to judge the health of the whole business. Whether you are negotiating with suppliers, planning a discount campaign or just checking a single trade, knowing your profit and loss numbers leads to smarter, more confident decisions.