Profit and Loss Calculator

The Profit and Loss Calculator estimates your net gain and margin percentage based on your Cost Price and Selling Price. This tool helps business owners, shopkeepers, and investors determine the true profitability of any transaction. Whether you are tracking inventory sales, calculating investment returns, or analyzing daily expenses, this calculator provides the immediate financial clarity you need to make smart decisions.

Enter your total sales or revenue for the period
Direct costs of producing goods or services sold
Rent, salaries, marketing, utilities, etc.
Interest, dividends, rental income, etc.
Interest expense, one-time costs, etc.
Corporate tax rate (default 21% for US federal)

How Profit and Loss Is Calculated

Profit and loss represent the actual money earned or lost on a sale relative to the item's original cost. This calculation uses a standard accounting method to find both the raw cash amount and the efficiency percentage.

Profit/Loss = Selling Price - Cost Price; Profit Percentage = (Profit / Cost Price) * 100

Where:

  • Cost Price = The amount you paid to buy or make the item
  • Selling Price = The amount you received when selling the item

First, subtract the Cost Price from the Selling Price to determine the total dollar value gained or lost. This step tells you exactly how much money changed hands.

Next, divide that amount by the Cost Price and multiply by 100 to find the margin percentage. This step reveals the efficiency of your investment or sale.

This straightforward method ensures you have a clear view of your financial performance.

What Your Profit and Loss Means

Your result shows exactly how much value you created or destroyed during a specific transaction. It helps you understand if your current pricing strategy is working effectively.

  • Generating Profit: If your percentage is positive, such as 20% or 50%, you sold the item for more than it cost you to acquire. A higher margin indicates a very efficient business model or a premium product.
  • Analyzing a Loss: If your percentage is negative, like -15%, you sold the item for less than its value. This suggests you may need to raise prices or find cheaper suppliers to stop losing money.
  • Breaking Even: A result of 0% means you recovered your costs exactly without gaining extra capital.

Important: Remember to include hidden costs like shipping, taxes, or labor in your Cost Price for the most estimated results.

This tool is for educational purposes only and does not constitute professional financial advice. For complex business decisions or tax implications, please consult a qualified accountant or financial advisor.

To improve your results, monitor these metrics weekly to spot trends and adjust your strategies quickly.

Calculation logic verified using publicly available standards.

View our Accuracy & Reliability Framework →