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Math - Percent Profit and Loss

by AMANDA
(JAMAICA)

A A SHOPKEEPER BUYS 25 BALLS FOR $150.00

HE SELLS THEM FOR $8.00 EACH.

WHAT IS HIS PERCENTAGE PROFIT?

B IF HE SELLS THEM FOR $5.00 EACH WHAT WOULD HIS PERCENTAGE LOSS BE.

THANK YOU & GOD BLESS

Comments for Math - Percent Profit and Loss

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Sep 16, 2013

Percent
by: Staff

Answer

Part I
A percent of change is the ratio of the change in the original amount divided by the original amount (the decimal quotient is multiplied by 100 to convert the decimal into a percent).

$Percent Change$

When this ratio is positive it represents a percentage increase.

When this ratio is negative it represents a percentage decrease.

However, this definition can be slightly different where a business is concerned:

Profit Margin = ((Gross Profit) / (Revenue)) * 100

or

Profit Margin = ((Revenue - Cost of Goods Sold) / (Revenue)) * 100

The Profit Margin is also called the Margin on Sales.

Please notice that the denominator in this equation is Revenue rather than the Cost of Goods Sold. If we were to use the general definition of percentage change, the denominator would be the Cost of Goods Sold (the original amount).

$Profit Margin$

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Sep 16, 2013

Percent
by: Staff

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Part II

On the other hand, the Gross Profit Margin does express the profit margin as a percentage of the cost of goods sold (the original amount).

Gross Profit Margin = ((Revenue - Cost of Goods Sold) / (Cost of Goods Sold)) * 100

The Gross Profit Margin is commonly referred to as the Markup .

$Gross Profit Margin$

[A] PERCENTAGE PROFIT

Calculating Profit Margin

Profit Margin = Revenue - Cost of Goods Sold

Cost of Goods Sold = $150

Sales = $8.00 * 25 BALLS = $200

Profit Margin in % = (Gross Profit / Revenue) * 100

therefore

Profit Margin = ((Revenue - Cost of Goods Sold) / Revenue) * 100

Profit Margin in % = (($200 - $150) / $200 ) * 100

Profit Margin in % = 25 %

$Calculate Profit Margin$

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Sep 16, 2013

Percent
by: Staff

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Part III

Gross Profit Margin (the Markup) = ((Revenue - Cost of Goods Sold) / (Cost of Goods Sold)) * 100

Gross Profit Margin in % = (($200 - $150) / $150 ) * 100

Gross Profit Margin in % = 33 ⅓ %

$Calculate Profit Margin$

[B] PERCENTAGE LOSS

When the cost of goods sold is greater than the revenue, this difference represents a loss.

Percentage Change = ((Revenue - Cost of Goods Sold) / (Cost of Goods Sold )) * 100

Cost of Goods Sold = $150

Sales = $5.00 * 25 BALLS = $125

Percentage Change = ((Revenue - Cost of Goods Sold) / (Cost of Goods Sold )) * 100

Percentage Change = (($125 - $150) / $150) * 100

Percentage Change = -16 ⅔ %

Percentage Loss = 16 ⅔ %

$Calculate Percentage Loss$

Thanks for writing.

Staff
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Math - Percent Profit and Loss

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