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Manufacturer produces goods at a certain cost. If goods are sold at a higher price than the cost price, then the manufacturer makes a profit or gain. But, if for some reason, the manufacturer sells goods at lower price than the cost price, then he suffers a loss.
Thus Profit = Selling Price – Cost price
Loss = Cost Price – Selling Price
Suppose, a person bought a book of Rs.100 and sold it for Rs.120. He makes a profit of Rs.20
i.e. Profit = 120 – 100 = Rs.20
Similarly if a person bought a machine for Rs.500 and sold it for Rs.400, then he make a loss of Rs.100
i.e. Loss = 500 – 400 = Rs.100
Percentage Profit and Percentage Loss:
For the purpose of comparison, we usually express the actual profits or loss as a percentage of cost price.
e.g. a shopkeeper sold an article for Rs.60 which costs Rs.50 and another article sold for Rs.110 which cost Rs.100. In each case, shopkeeper makes a profit of Rs.10. It seems that in both cases profit is equally gained.
But in percentage profit, we have
Percentage Profit =  x 100% = 20%
Percentage Profit =  x 100% = 10%
Hence, in first case he made a more profit than in 2nd case, this is better and accurate method for comparison.
Example:
A bag costing Rs.28 sold for Rs.35. Find percentage profit.
Solution:
Let Cost Price = Rs.28
Selling Price = Rs.35
Profit = Selling Price – Cost Price = 35 – 28 = Rs.7
Percentage Profit =  x 100% = 25%
Example:
A machine costing Rs.60 and sold for Rs.50. Find percentage loss.
Solution:
Let Cost Price = Rs.60
Sold Price = Rs.50
Loss = Cost Price – Sold Price = 60 – 50 = Rs.10
Percentage Loss =  x 100% =  %
Example:
Let a bookseller gain 30% by selling a book for Rs.65. Find the cost price of the book.
Solution:
Let  be the cost price
Profit = 30% of  = 
But Profit = Selling Price – Cost Price
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