Working out percentage profit in 3 simple steps (percentage profit formula).

Working out the percentage profit can be fairly straight forward if you know how!

Follow these 3 simple steps:

Step A Work out the difference in cost between what you bought the item for (cost price) and what you sold the item for (selling price).

Step B Divide Step A by the price you bought the item for (cost price)

Step C Multiply the answer from step B by 100!

Or if you prefer use the formula:

Percentage profit =  Difference in cost/cost price  × 100.

Example 1

I bought an antique plate at a charity shop for $12 and resold it on Ebay for $15. What is my percentage profit?

Step A The difference in cost is $15 - $12 = $3

Step B Divide $3 by the price I bought it for at the charity shop ($12). So 3 ÷ 12 = 0.25

Step C 0.25 × 100 = 25%

Example 2

I buy a TV out of the local newspaper for $400, and sell it to work colleague for $600. What is my percentage profit?

Step A Work out the price difference. $600 - $400 = $200

Step B Divide step A by the original price  (cost price). 200 ÷ 400 = 0.5.

Step C Times 0.5 by 100 to give a 50% profit.

Sometimes our percentage profit can be larger than 100. Take a look at this next example.

Example 3

An antique watch bought in 2008 cost me $150. This year I sell the watch in auction for $750. What percentage profit did I make?

Step A $750 - $150 = $600 (difference in cost)

Step B  $600 ÷ $150 = 4 (divide the difference by the cost price)

Step C  4 × 100 = 400%.

So my percentage profit in the last example was a massive 400%. If you manage to sell anthing for over 100% you must be quite a good business man/woman!