What is Profit Formula? Uses, Types, Examples

Profit Formula

When someone gets more or extra than they have invested in something, it is recognized as a profit. In easier words, profit can also be interpreted as a benefit they got from a certain thing. The profit formula is mentioned below –

Profit = Selling payment – Cost payment

In this, selling payment is the payment done when that item or that object has been sold and, the cost payment is the payment done when the item or that object has been bought. 

Selling payment is denoted by SP and the cost payment is denoted by CP.

Profit% = Profit * 100 / Cost price

Types of Profit

There are three types of profit. Those three are as follows –

  • Gross profit
  • Operating profit
  • Net profit

Uses of Profit Formula

With the help of the profit formula, one gets to have promising analysis skills in the circumstances. They also get to solve day-to-day life situations strongly. One gets benefited in the situations occurring in front of them. This helps them in their schools, banks, workplaces, and many others. In our life, there is constantly a competition between profit and loss.


A few examples of the profit formula are:

Example 1: If someone sells an object for 100 rupees. The cost price of that particular object is 50 rupees. Then, find the profit gained in this situation.


CP = 50 rupees

SP = 100 rupees

Profit formula = SP – CP

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After solving, we get 50. Hence, that individual will gain a profit of 50 rupees.

Example 2: If someone sells an object for 50 rupees. The cost price of that distinct object is 40 rupees. Then, find the profit % gained in this situation.


CP = 50 rupees

SP = 40 rupees

To get the profit %, we have to discover the profit gained in this situation.

Profit formula =  SP – CP

After solving, we get 10. Hence the profit gained in this situation is 10 rupees.

Now, for the profit %,

putting all the values in this formula,

Profit % = 10* 100 /50

We will get 20 %.

Hence, the profit % in this situation is 20%.

Example 3: If someone is selling an item for 100 rupees. That person is gaining 10% on it. Find the CP of that particular item.


            For this, first of all, we have to write everything given in the question.

SP = 100

Gain% = 10 %

CP =?

Let the SP = 100

When the SP is 100, then

SP = 100 + 10 = 110

When SP = 110 at CP = 100

Then, CP = 100/110 * 100

We will get 90.9090…


A loss is a situation when someone gets less than whatever they have invested. When the selling payment is less than the cost payment, then loss arises.

Loss = Cost payment – Selling payment.

Loss% = loss *100 / cost payment.

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