Money & Finance · Lesson 9 of 14

Profit and Loss

Profit is selling price minus cost price when that is positive. If it is negative there is a loss. Percentage profit compares profit with the cost.

Secondary
Updated 14 November 2026

What you will learn

Find profit and loss.
Find profit as a percentage of cost.
Set a price for a target profit.

Before you start: you should be able to find a percentage of an amount. See Percentage Increase and Decrease.

The idea

A shop buys goods at a cost price and sells them at a selling price. If it sells for more it makes a profit. If it sells for less it makes a loss.

Cost £12 and selling price £18. The difference, £6, is the profit.

Percentage profit

To compare deals fairly, express profit as a percentage of the cost: profit divided by cost, times $100$ .

Three trades. A positive percentage is profit and a negative one is a loss.

Setting a selling price

For a $20\%$ profit on a £50 cost, find $20\%$ of $50 = 10$ and add it: £60.

Worked examples

Example 1: Profit

Cost £12, sold for £18.

$18 - 12 = 6$ .

Answer: profit £6

Example 2: Percentage

Profit £6 on cost £12.

$6 \div 12 = 0.5$ .
$0.5 \times 100 = 50\%$ .

Answer: $50\%$

Example 3: Loss

Cost £80, sold for £68.

Loss $= 80 - 68 = 12$ .
$12 \div 80 = 15\%$ .

Answer: $15\%$ loss

Tip: always divide by the cost price, not the selling price.

Why it matters

Anyone who sells things, from a market stall to a big shop, uses profit and loss. It also helps you judge whether a price is fair. Next: tax on a price.

Practice

Your turn. Type or choose an answer, then press Check. Getting one wrong is fine, that is what practice is for. You can try as many times as you like.