Loss Percentage
Loss percentage refers to the amount of loss incurred on any commodity in percentage. It is also called percentage loss. When the selling price is less than the cost price of any commodity, then we consider it as a loss, the amount of which can be calculated by finding the difference between the cost price and the selling price. The loss percentage is the percent of loss in terms of actual cost price.
In this lesson, let's learn about loss percentage, loss percentage formula, and how to calculate loss percentage with solved examples.
| 1. | What is Loss Percentage? |
| 2. | Loss Percentage Formula |
| 3. | Calculating Loss Percentage |
| 4. | Examples on Loss Percentage |
| 5. | FAQs on Loss Percentage |
What is Loss Percentage?
Loss percentage refers to the amount of loss incurred in percentage. Loss is a term that comes into the picture when the cost price is greater than the selling price. Thus, it is actually the difference between the cost price and the selling price and the percentage loss is the percent of loss in terms of actual cost price. When the selling price and cost price are known, the basic formula for calculating the loss is:
Loss = Cost price (C.P.) - Selling price (S.P.)
Where,
- C.P. = the actual price of the product.
- S.P. = the price at which the product has been sold to the customer.
Since the percentage loss is the percent of loss in terms of actual cost price, thus, the loss percentage formula involves the ratio of loss incurred to the cost price multiplied by 100.
Loss Percentage Formula
For comparison purposes, the amount of profit or loss is often expressed in the form of a percentage. Thus, after determining the profit or loss for any case, it is actually converted in the form of a percentage. Loss percentage is calculated as, Loss percentage(L%) = (Loss / Cost price) × 100.
Other related formulas are given below:
- Profit percentage(P%) = (Profit /Cost Price) × 100
- S.P. = {(100 + P%)/100} × CP(if SP > CP)
- S.P. = {(100 – L%)/100} × CP(if SP < CP)
- C.P. = {100/(100 + P%)} × SP(if SP > CP)
- C.P. = {100/(100 – L%)} × SP(if SP < CP)
Deduction of Loss Percentage Formula
The formula for calculating the loss can be derived using the selling price and the cost price. Simply, if a product is sold at a lesser price than the price at which it was bought, then a loss has been incurred in the transaction. Thus, the formula for finding the amount of loss incurred is given by,
Loss = Cost Price - Selling Price
Since loss is incurred on cost price for any commodity, thus, Loss Percentage = (Loss/Cost Price) × 100.
Calculating Loss Percentage
In order to calculate the loss percentage, we need to follow the simple steps given below.
- Step 1: Check for the parameters, mainly cost price and selling price.
- Step 2: Find the difference between cost price and selling price, C.P. - S.P. = loss incurred.
- Step 3: Substitute the values in the formula, Loss Percentage = (Loss/Cost Price) × 100.
- Step 4: Write the answer so obtained with the percentage symbol.
Example: Determine the loss percentage if the CP of a commodity = $75 and SP = $50.
Loss = CP - SP
= 75 − 50 = $25
Loss (%) = (Loss/CP) × 100
= (25/75) × 100
= 33.34%
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FAQs on Loss Percentage
What is Loss Percentage?
Loss percentage refers to the amount of loss incurred which is expressed or calculated in percentage. Since the percentage loss is the percent of loss in terms of actual cost price, thus, the loss percentage formula is the ratio of loss incurred to the cost price multiplied by 100.
What is the Formula of Loss Percentage?
Since loss is incurred on cost price for any commodity, thus, Loss Percentage = (Loss/Cost Price) × 100.
How to Find Loss Percentage?
In order to calculate the loss percentage, we need to follow the simple steps given below.
- Step 1: Check if CP > SP.
- Step 2: Find the amount of loss incurred using the formula, C.P. - S.P.
- Step 3: Substitute the values in the formula, Loss Percentage = (Loss/Cost Price) × 100.
- Step 4: Write the value so obtained using the percentage symbol.
How to Calculate Profit and Loss Percentage?
To calculate profit and loss, the cost price and the selling price of the product should be known. The basic formulas that are used to calculate the profit and loss are given below:
- Profit = Selling Price - Cost Price
- Loss = Cost Price - Selling Price
Given below are the formulas that are used to calculate the profit and loss percentage.
- Profit percentage (P%) = (Profit /Cost Price) × 100
- Loss percentage (L%) = (Loss / Cost price) × 100
How to Calculate the Selling Price if Loss Percentage and Cost Price Are given?
We know that Cost Price = Selling price + Loss
- Cost Price = Selling Price + (Loss Percentage × Cost Price)/100
- Cost Price - (Loss Percentage × Cost Price)/100 = Selling Price
- Cost Price[1 - Loss Percentage/100] = Selling Price
- Cost Price [100 - LossPercentage/100] = Selling Price
Also, Cost Price = Selling Price × 100 - LossPercentage (on Cross Multiplication).