It is interesting for firms to work out what their percentage profit is when they sell products in their shop. We are able to work out percentage profit by using the formula below:

We work out profit by taking the costs away from sales. Therefore, the formula for working out percentage profit can be written as:

Now that we have both of these formulas, it is just a case of subbing the values that we are given in the question into their appropriate places. Let’s have a few examples!

**Example 1**

I purchase a bag for £8 and sell it for £11. What is my percentage profit?

I am going to work out the percentage profit by using the second formula and this formula is given below:

We are told in the question that my sales are £11 and my costs are £8; we sub these values into the formula.

The percentage profit is 37.5%.

**Example 2**

I sell a table for £235. The table costs me £170 to make. Work out the percentage profit and give your answer to 3 significant figures.

I am going to work out the percentage profit by using the same formula as the previous question. This formula is given below:

The question tells us that the sales are £235 and the costs are £170; we sub these values into their appropriate places in the formula.

The question asks us to give our percentage to 3 significant figures. When we are rounding to significant figures, we start counting the significant figures from the first non-zero starting from the left. This means that the first significant figure is 3, the second significant figure is 8, the third significant figure is 2 and the fourth significant figure is 3 etc…

We are rounding to 3 significant figures, so we draw a line after the third significant figure and look at the fourth significant figure. The fourth significant figure is a 3, which is less than 5. This means that we round our number down resulting in the answer being 38.2%.

The percentage profit is 38.2%.