Profit & Loss Calculator - Calculate P&L

Cost Price

₹

₹1₹1,00,00,00,000

Selling Price

₹

₹0₹1,00,00,00,000

Profit / Loss

₹200

Profit / Loss %

20.00%

Gross Margin

16.67%

What is a P&L?

A Profit & Loss Calculator computes the profit or loss amount, the profit or loss percentage on cost price, and the gross margin on selling price — the three metrics that define whether a transaction is commercially viable. Enter the cost price and selling price for any product or deal and the calculator instantly shows whether you made or lost money, by how much, and at what margin.

Profit and loss arithmetic is taught in Indian schools from Class 7 onwards and is one of the most applied mathematical concepts in everyday commerce. Whether a kirana shop owner is pricing day-to-day stock, a freelancer is checking whether a project rate covers costs, a small trader is evaluating a supplier's quote, or a student is verifying CBSE homework — the same three formulas apply.

Profit = Selling Price − Cost Price (when SP > CP) Loss = Cost Price − Selling Price (when SP < CP) Profit% = (Profit ÷ Cost Price) × 100

The profit percentage always uses cost price as the base — this is the school mathematics convention and the standard for trading. Gross margin, by contrast, uses selling price as the base and is the metric preferred in retail analytics and financial reporting. Both are useful; the distinction matters when benchmarking against industry data.

A 20% profit on cost (markup) and a 20% gross margin on revenue are not the same thing: a 20% markup yields a 16.67% gross margin, and a 20% gross margin requires a 25% markup. This calculator shows both, eliminating the confusion that arises from using the two metrics interchangeably.

For transactions where a discount was applied before arriving at the selling price, use the Discount Calculator to compute the post-discount selling price first, then bring it here to evaluate the resulting margin.

How to use this P&L calculator

Enter the Cost Price — the price at which you acquired or produced the item. Include all acquisition costs: purchase price, freight, customs duty, and any other cost directly attributable to acquiring the item. Use the slider for round-number exploration or type the exact value.
Enter the Selling Price — the price at which you sold or plan to sell. If the item was discounted, enter the final post-discount price. For a list price not yet finalised, use the slider to find the selling price that achieves your target margin.
Read Profit / Loss — positive means profit, negative means loss. The step breakdown labels the scenario explicitly so you can see at a glance.
Compare Profit% and Gross Margin — note that these two percentages will always differ unless profit is zero. Profit% will be higher than Gross Margin whenever there is a positive profit (because the cost base is smaller than the revenue base). Use Profit% for cost-based decision making; use Gross Margin for revenue-based benchmarking.
Iterate using the sliders — to find the selling price that achieves a target profit (e.g., 30% on cost), move the Selling Price slider upward while watching the Profit / Loss % output. The selling price at which Profit / Loss % equals your target is the price to quote.

Formula & Methodology

Profit / Loss Amount:
Profit / Loss = Selling Price − Cost Price
(Positive = Profit; Negative = Loss)

Profit / Loss Percentage (on Cost Price):
P/L% = (Profit or Loss ÷ Cost Price) × 100

Gross Margin (on Selling Price):
Gross Margin = (Profit or Loss ÷ Selling Price) × 100

Variables:
- Cost Price (CP) = Price paid to acquire or produce the item (₹)
- Selling Price (SP) = Price received on sale (₹)

Worked example — CP = ₹750, SP = ₹1,050:

Profit = ₹1,050 − ₹750 = ₹300Profit% = (₹300 ÷ ₹750) × 100 = 40%Gross Margin = (₹300 ÷ ₹1,050) × 100 = 28.57%

Worked example — loss scenario — CP = ₹5,000, SP = ₹4,250:

Loss = ₹5,000 − ₹4,250 = −₹750 (a loss)Loss% = (₹750 ÷ ₹5,000) × 100 = −15%Gross Margin = (−₹750 ÷ ₹4,250) × 100 = −17.65%

Finding selling price for a target profit%:
SP = CP × (1 + Target Profit% ÷ 100)
For 25% profit on CP = ₹800: SP = ₹800 × 1.25 = ₹1,000

Assumptions and limitations:
- Cost Price and Selling Price are entered as single values — the calculator does not model multi-unit lot pricing, weighted average costs, or landed costs with multiple components
- GST is not factored into the P&L calculation — for accurate margins, enter ex-GST prices
- The calculator does not model overhead allocation, operating expenses, or taxes on profit — this is a product-level gross P&L, not a business-level net P&L

Frequently Asked Questions

What is the formula for profit and loss in mathematics?

The three core formulas are: Profit = Selling Price − Cost Price (when SP > CP); Loss = Cost Price − Selling Price (when CP > SP); and Profit% or Loss% = (Profit or Loss ÷ Cost Price) × 100. These formulas are the foundation of Class 7–10 CBSE/ICSE mathematics and appear in virtually every commercial arithmetic problem. The cost price is always the reference base for percentage calculations — profit and loss percentages are expressed as a fraction of what you paid, not what you received.

What is the difference between gross profit and net profit?

Gross profit = Revenue − Cost of Goods Sold (COGS); it measures profitability before operating expenses like rent, salaries, and marketing. Net profit = Gross Profit − Operating Expenses − Interest − Taxes; it reflects the final amount the business retains after all deductions. This calculator computes gross profit (selling price minus cost price) — for a trader or manufacturer, this is the margin on the product itself before overheads. Net profit is more relevant for business viability but requires a complete P&L statement beyond simple product costing.

What is gross margin and how is it different from profit percentage?

Profit percentage is calculated on cost price: (Profit ÷ CP) × 100. Gross margin is calculated on selling price: (Profit ÷ SP) × 100. For SP = ₹1,200 and CP = ₹1,000: Profit% = (200 ÷ 1,000) × 100 = 20% (on cost); Gross Margin = (200 ÷ 1,200) × 100 = 16.67% (on revenue). Retailers typically use gross margin to discuss profitability (because revenue is the top line), while school mathematics and trading use profit% on cost price. Both are calculated on this page.

How do I calculate loss percentage?

Loss% = (Loss ÷ Cost Price) × 100, where Loss = Cost Price − Selling Price. If a dealer buys goods at ₹5,000 and sells at ₹4,200, the loss is ₹800 and Loss% = (800 ÷ 5,000) × 100 = 16%. On this calculator, when Selling Price < Cost Price, the 'Profit / Loss' output and 'Profit / Loss %' output will both show negative values — a negative profit is a loss, and a negative percentage indicates the selling price is that fraction below the cost.

What is the difference between markup and gross margin?

Markup = (Profit ÷ Cost Price) × 100, which is the same as profit percentage on cost. Gross Margin = (Profit ÷ Selling Price) × 100. A 25% markup means you add 25% to cost price to get selling price — so if CP = ₹100, SP = ₹125 and Gross Margin = 25 ÷ 125 × 100 = 20%. The two are not the same percentage: a 50% markup yields a 33.3% gross margin. Retailers often work in markup but report in margin — confusing the two leads to systematic pricing errors.

What is break-even point and how is it calculated?

The break-even point is the selling price at which Profit = 0, i.e., Selling Price = Cost Price. For a retailer, it is the minimum price that covers the cost of goods. In business, break-even analysis extends to include fixed costs: Break-Even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). Understanding break-even is essential before setting any promotional discount — selling below cost to drive volume requires sufficient volume recovery through other high-margin products.

How is profit and loss used in CBSE/ICSE Class 7–10 mathematics?

CBSE Class 7 introduces Profit and Loss as part of 'Comparing Quantities', establishing the CP/SP definitions and percentage formulas. Class 8 extends this to multi-step problems involving successive discounts, VAT (historically), and GST from Class 8 onwards. ICSE follows a similar progression. Standard exam problems include: finding SP given CP and profit%, finding CP given SP and loss%, finding profit% given CP and SP — all three of which this calculator computes directly. The step-by-step breakdown shows the working for exam verification.

How does GST affect profit calculations for small businesses and traders in India?

Under GST, a registered trader collects output GST from customers and pays input GST on purchases. Profit is computed on prices excluding GST: if CP (ex-GST) = ₹1,000 and SP (ex-GST) = ₹1,200, the profit is ₹200 regardless of the 18% GST rate. The GST collected is not income — it flows through to the government via the return. For unregistered businesses dealing with GST-inclusive prices, the effective CP and SP must first be stripped of GST before calculating profit. Use the [GST Calculator](/gst-calculator/) to extract the ex-GST price before entering values here.

What does it mean when selling price equals cost price?

When SP = CP, profit = 0 and profit% = 0. This is the break-even point — the seller recovers exactly the cost of goods but makes no margin. In practice, a business selling at cost price is losing money when overhead costs (rent, labour, delivery) are accounted for, even though the product-level P&L shows no profit or loss. A break-even on product cost is therefore a loss at the business level — the gross margin must be high enough to cover all operating expenses and still leave net profit.

How do shopkeepers and traders calculate selling price in India?

The standard formula is: SP = CP × (1 + Profit% ÷ 100). If a kirana shop owner buys rice at ₹45/kg and wants 15% profit, SP = ₹45 × 1.15 = ₹51.75/kg. For losses, SP = CP × (1 − Loss% ÷ 100). Many small traders use a simple multiplier — 'double the cost' means 100% markup (50% margin), common in handloom and craft retail. This calculator is particularly useful for traders who know their cost price and a target profit margin but need to quickly compute the selling price or verify it on an existing quote.

Can the profit percentage exceed 100%?

Yes — profit percentage on cost price can exceed 100% when the selling price is more than double the cost price. Luxury goods, branded merchandise, and high-margin speciality products often show markup percentages of 200–500% or more. For example, if a craft item costs ₹200 to make and sells for ₹700, the profit is ₹500 and profit% = (500 ÷ 200) × 100 = 250%. Gross margin in this case is (500 ÷ 700) × 100 = 71.4%. There is no mathematical limit to profit percentage — only market and competitive constraints.

What is the difference between cost price and market price in commerce?

Cost Price (CP) is the price at which a trader acquires a good — including purchase price, transport, and any overheads attributable to acquisition. Market Price (or Selling Price, SP) is the price at which the trader sells to a customer. In school mathematics, these two are the only prices considered. In business, MRP (Maximum Retail Price in India), wholesale price, trade price, and ex-factory price are additional price points in the supply chain, each carrying its own profit percentage relative to the one below it.