Understanding Company Profit and Loss Percentage

The question asks us to identify the company that earned the maximum percentage profit in the year 2021 based on the provided table showing Income and Expenditure. We are given the formula to calculate the percent profit or loss:

$\text{(Profit/Loss) %} = \frac{\text{(Income - Expenditure)}}{\text{Expenditure}} \times 100$

If the result is positive, it's a profit percentage. If the result is negative, it's a loss percentage.

Let's first look at the data provided in the table:

Now, we will calculate the Profit/Loss percentage for each company using the formula:

• Company A: Income = 35, Expenditure = 45 Profit/Loss % = $\frac{(35 - 45)}{45} \times 100 = \frac{-10}{45} \times 100 = -\frac{2}{9} \times 100 \approx -22.22\%$ Company A incurred a loss of approximately 22.22%.
• Company B: Income = 50, Expenditure = 40 Profit/Loss % = $\frac{(50 - 40)}{40} \times 100 = \frac{10}{40} \times 100 = \frac{1}{4} \times 100 = 25\%$ Company B earned a profit of 25%.
• Company C: Income = 40, Expenditure = 45 Profit/Loss % = $\frac{(40 - 45)}{45} \times 100 = \frac{-5}{45} \times 100 = -\frac{1}{9} \times 100 \approx -11.11\%$ Company C incurred a loss of approximately 11.11%.
• Company D: Income = 40, Expenditure = 30 Profit/Loss % = $\frac{(40 - 30)}{30} \times 100 = \frac{10}{30} \times 100 = \frac{1}{3} \times 100 \approx 33.33\%$ Company D earned a profit of approximately 33.33%.
• Company E: Income = 50, Expenditure = 45 Profit/Loss % = $\frac{(50 - 45)}{45} \times 100 = \frac{5}{45} \times 100 = \frac{1}{9} \times 100 \approx 11.11\%$ Company E earned a profit of approximately 11.11%.

Comparing Profit Percentages for Maximum Profit

Now we compare the profit percentages for the companies that made a profit (positive percentage):

• Company B: 25%
• Company D: 33.33%
• Company E: 11.11%

Among these, Company D has the highest profit percentage (approximately 33.33%). Companies A and C incurred losses.

Conclusion: Maximum Percentage Profit

Based on the calculations, Company D earned the maximum percentage profit in the year 2021 with approximately 33.33% profit.

Revision Table: Company Performance 2021

Additional Information: Understanding Profit and Loss Calculations

Profit or loss is a fundamental concept in business and finance. It is calculated by comparing a company's income (revenue) with its expenditure (costs).

• Profit: Occurs when Income > Expenditure. It represents the financial gain.
• Loss: Occurs when Income < Expenditure. It represents the financial deficit.
• Break-even: Occurs when Income = Expenditure. There is neither profit nor loss.

The percentage profit or loss is calculated relative to the expenditure. This gives a standardized measure of performance, showing how much profit or loss was generated for every unit of currency spent. This is particularly useful for comparing the efficiency of different companies or the performance of the same company over different periods, especially if their scale of operations varies.

The formula $\frac{\text{(Income - Expenditure)}}{\text{Expenditure}} \times 100$ highlights the profit or loss amount (Income - Expenditure) as a fraction of the initial investment or cost (Expenditure), scaled to a percentage.