## Percentage of Loss Calculator

Percentage of Loss <a href="https://studysaga.in/calculator-studysaga/">Calculator</a>

# Percentage of Loss Calculator

When a business incurs a loss, it is important to understand the extent of the loss and the impact it has on the business. One way to quantify the loss is by calculating the percentage of loss. This is a useful metric for businesses to assess the impact of losses and take corrective actions.

The formula for calculating the percentage of loss is:

Percentage of loss = (Loss / Cost Price) x 100

Here, the loss refers to the difference between the cost price and selling price of a product. If the selling price is lower than the cost price, the business incurs a loss. The cost price is the price at which the product was acquired by the business.

Let’s take an example to illustrate how to calculate the percentage of loss.

Example: A business buys a product for \$100 and sells it for \$80. Calculate the percentage of loss incurred by the business.

Solution:

Loss = Cost Price – Selling Price Loss = \$100 – \$80 = \$20

Percentage of loss = (Loss / Cost Price) x 100 Percentage of loss = (\$20 / \$100) x 100 Percentage of loss = 20%

So, the business incurred a loss of 20% on the product.

Another example:

Example: A business buys a product for \$500 and sells it for \$550. Calculate the percentage of profit or loss incurred by the business.

Solution:

Profit/Loss = Selling Price – Cost Price Profit/Loss = \$550 – \$500 = \$50

Percentage of profit or loss = (Profit/Loss / Cost Price) x 100 Percentage of profit or loss = (\$50 / \$500) x 100 Percentage of profit or loss = 10%

So, the business incurred a profit of 10% on the product.

It is important to note that a negative percentage of profit or loss indicates a loss, while a positive percentage indicates a profit.

Here are some examples of percentage of loss:

1. A store bought a stock of T-shirts for \$100 each and sold them for \$80 each. Find the percentage of loss incurred by the store. Solution: The cost price of each T-shirt is \$100 and the selling price of each T-shirt is \$80. So, the loss per T-shirt is \$20. Percentage of loss = (Loss / Cost Price) × 100% = (20 / 100) × 100% = 20% Therefore, the percentage of loss incurred by the store is 20%.

2. A car owner sold his car for \$20,000, which is 25% less than the original cost price. Find the original cost price of the car. Solution: Let the original cost price of the car be x. According to the problem, the selling price of the car is \$20,000, which is 25% less than the original cost price. Therefore, Selling price = Original cost price – (25% of Original cost price) 20000 = x – (0.25x) 20000 = 0.75x x = 20000 / 0.75 x = 26666.67 Therefore, the original cost price of the car is \$26,666.67.

3. A company bought 500 shares of a company at \$100 per share. Later, it sold them for \$80 per share. Find the percentage of loss incurred by the company. Solution: The cost price of each share is \$100 and the selling price of each share is \$80. So, the loss per share is \$20. Total loss = Loss per share × Number of shares = 20 × 500 = \$10,000 Total cost price = Cost price per share × Number of shares = 100 × 500 = \$50,000 Percentage of loss = (Total loss / Total cost price) × 100% = (10000 / 50000) × 100% = 20% Therefore, the percentage of loss incurred by the company is 20%.

The percentage of loss is a useful metric for businesses to assess the impact of losses and take corrective actions. By knowing the percentage of loss, businesses can determine if they need to adjust their prices, reduce costs, or find new revenue streams.