1. What is Profit/Loss Percentage?

The profit/loss percentage measures the gain or loss relative to the cost of an investment or business transaction. It shows the percentage change between the cost price and the selling price.

2. How Does the Calculator Work?

The calculator uses the profit/loss percentage formula:

Where:

• \( \text{Profit or Loss} \) — Selling price minus cost price (negative for loss)
• \( \text{Cost} \) — Original cost or investment amount

Explanation: The formula calculates what percentage of the original cost was gained or lost in the transaction.

3. Importance of Profit/Loss Calculation

Details: Calculating profit/loss percentage is essential for financial analysis, investment decisions, pricing strategies, and business performance evaluation.

4. Using the Calculator

Tips: Enter the profit/loss amount (positive for profit, negative for loss) and the original cost. Both values must be in dollars and cost cannot be zero.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between profit amount and profit percentage?
A: The amount shows absolute dollars gained/lost, while percentage shows relative performance compared to the investment.

Q2: Can the percentage be more than 100%?
A: Yes, profit percentage can exceed 100% if the profit is greater than the original cost.

Q3: How is loss percentage represented?
A: Loss percentage is shown as a positive number with "Loss" indicator (the calculator handles the sign automatically).

Q4: Why can't cost be zero?
A: Division by zero is mathematically undefined. Cost must be a positive value.

Q5: Can I use this for multiple items?
A: This calculates for a single transaction. For multiple items, sum all profits/losses and total costs first.