A worked example: cost ₹800, sold for ₹1,000
An item bought for ₹800 and sold for ₹1,000 makes a profit of ₹200, or 25% on cost.
The formula: (selling − cost), then divide by cost
Profit amount = selling price − cost price: ₹1,000 − ₹800 = ₹200. Profit percentage = profit ÷ cost price × 100: ₹200 ÷ ₹800 × 100 = 25%. The percentage is calculated on cost price, the same convention as markup.
A second example: cost ₹1,500, sold for ₹1,800
A ₹300 profit on a ₹1,500 cost price gives 20% — a smaller percentage than the first example even though the rupee profit (₹300) is larger than ₹200, because the base cost price is also larger.
Why profit percentage on cost isn't the same as margin
Calculating the same ₹200 profit on the ₹1,000 selling price instead of the ₹800 cost price would give 20%, not 25% — a genuinely different number answering a genuinely different question ("profit margin" on revenue vs. "profit percentage" on cost). Mixing the two up is a common source of mismatched figures when comparing pricing across sources.