This may seem like a fairly simple question, but it can be confusing if you fail to break it down into the proper steps. Stock trades generate dollar profits and/or losses, which are measured in percentages. Let's use a simple example to illustrate:
Suppose an investor buys 100 shares of Cory's Tequila Company (CTC) at $10/share for a total investment is $1,000. Now suppose two months later the investor sells the 100 CTC shares for $17/share. They receive $1,700, and their profit for the trade is $700.
A profit of $700, however, means very little to an investor, unless they know how large of an investment was required to earn that $700. For example, suppose the investor had also bought 1,000 shares in Rob's Sake Distillers (RSD) at $10 apiece (for a total investment of $10,000), and later sold the 1,000 shares at $10.70 each per share, or for a total $10,700. With this trade, they would have profited by $700, yet it took ten times the investment compared to CTC to earn it.
To avoid this sort of profit ambiguity, investment returns are expressed in percentages. The CTC investment was made at $10/share and sold at $17/share. The per share gain is $7 ($17  $10). Thus, your percentage return on your $10/share investment is 70% ($7 gain / $10 cost). This 70% return would be the same if they had invested in 100 shares or 100,000 shares, provided all the shares were bought at $10 and then sold at $17. By multiplying the percentage return on the investment (70%) by the total dollar amount invested, investors will know how much in dollar terms they have made on this investment (70% return on $1,000 in $1,700 providing a dollar gain of $700).
Using this method, your RSD investment would have yielded only a 7% return ($0.70 gain / $10 cost). So, even though your RSD gain of $700 (7% x $10,000) is equal to your CTC gain, clearly CTC's return is much higher at 70% compared to 7% for RSD.
(Now that you understand how to measure stock investment profits and losses, learn how setting predetermined limits on your profits and losses can improve your investment performance by reading

What's the smallest number of shares of stock that I can buy?
The answer to this question is not as straightforward as it seems. Many people would say that the smallest number of shares ... Read Answer >> 
How do you calculate the percentage gain or loss on an investment?
Calculating the percentage change of your investment is quite easy. All it takes is a little bookkeeping and either a simple ... Read Answer >>

Investing
Will Russia Annex CTC Media? (CTCM)
On July 6th, CTC Media (NASDAQ: CTCM) announced it had received a "formal, nonbinding offer from UTH Russia, a privately held Russian commercial television broadcasting group" for the latter ... 
Investing
Investing $100 a Month in Stocks for 20 Years
Learn how a monthly investment of just $100 can help build a future nest egg using properly diversified stocks or stock mutual funds. 
Managing Wealth
Understanding Total Returns
Total return measures the rate of return earned from an investment over a period of time. 
Trading
Choosing Between DollarCost And Value Averaging
These are two investing practices that seek to counter our natural inclination toward market timing by canceling out some of the risk. 
Investing
Defining the 3 Types of Investments
The first step to being a successful investor is knowing what is and isn't an investment. 
Financial Advisor
5 Questions First Time Investors Should Ask in 2016
Learn five of the most important questions you need to ask if you are a new investor planning on starting an investment program in 2016. 
Financial Advisor
How to Know When to Pass on an Investment
Knowing what to invest in is important, but knowing what not to invest in is equally important. Here's how to decide when to walk away. 
Investing
Ten Worst Mistakes Beginner Investors Make
Here are the ten worst mistakes beginning investors make.

Compound
The ability of an asset to generate earnings, which are then ... 
Accounting Rate of Return  ARR
The amount of profit, or return, that an individual can expect ... 
DollarCost Averaging  DCA
The technique of buying a fixed dollar amount of a particular ... 
Annual Return
The return an investment provides over a period of time, expressed ... 
Per Share Basis
A measure used in the financial world to illustrate the quantity ... 
Target Return
A pricing model that prices a business based on what an investor ...