In the context of profit percentage, what does the formula (Seller price / Cost price) - 1 signify?

The formula (Seller price / Cost price) - 1 is used to calculate the profit percentage in relative terms. When you divide the seller price by the cost price, you get a ratio that reflects how much the selling price exceeds the cost price. By subtracting 1 from this ratio, you essentially express the profit as a percentage of the cost price. This gives you a clear indication of the profitability of the transaction in relation to the original cost, allowing easier comparison across different sales or investment opportunities.

This calculation is particularly useful in business settings, as it provides insights into the efficiency and effectiveness of pricing strategies and cost management. The result can be interpreted as a proportion or percentage, facilitating better understanding of how much profit is earned for every unit of currency spent. Therefore, the selection of this option highlights its function in expressing relative profit in a meaningful way.