FINDING PERCENTAGE OF LOSS -
Percentage of loss is a financial metric used to measure the loss incurred in a business or investment relative to the initial value or investment. It is expressed as a percentage and indicates the proportion of loss compared to the original value.
The formula for calculating the percentage of loss is similar to the formula for calculating profit percentage, but it's used when the result is a negative value (indicating a loss):-
Loss
Percentage of Loss = --------------------------- X 100%
Initial Value or Investment
Where:
Example.1) If an investment originally valued at $10,000 decreases in value to $7,000, then find the percentage of loss.
Ans.) Percentage of Loss would be:-
10000 − 7000
Percentage of Loss = --------------- X 100%
10000
3000
= ----------- X 100% = 30%
10000
This means that the investment has experienced a 30% loss from its initial value. (Ans.)
Example.2) If you initially purchased a stock for $1,000 and its value has decreased to $800, then find the percentage of loss.
Ans.) The percentage would be:
1000 − 800
Percentage of Loss = ------------- X 100%
1000
200
= ---------- X 100% = 20%
1000
This means that the value of your investment has decreased by 20%. (Ans.)
Example.3) If you had a product that you bought for $50 and sold it for $40, then find the percentage of loss
Ans.) Percentage of would be:
50 − 40
Percentage of Loss = ------------- X 100%
50
10
= ------- X 100%
50
= 20%
This means you experienced a loss of 20% on the sale of the product (Ans.)
Percentage of loss is useful for assessing the negative impact of losses and understanding the extent of depreciation in the value of assets or investments. It helps investors and businesses make informed decisions regarding their financial strategies. The percentage of loss is a useful metric to assess the extent of a decrease in value or financial loss relative to the initial value or investment.