Profit and Loss
Profit and Loss are two major financial concepts which help us understand vast variety of things from daily budgeting to complex economical models. Profit and Loss also help us estimate the market price of a commodity and to assess how profitable a firm is. There is a selling price and a cost price for every product. Based on the values of these prices, we may compute the profit or loss for a certain product.
Profit (P)
Profit is defined as the amount gained by selling a product that is more than the product’s cost price. It is the total amount gained from any business activity.
For example: If a plot was purchased at Rs 150,000 and three years later it was sold at Rs 3,50,000 then there is a profit of 2 lakh.
Loss (L)
When a product is sold for less than its cost price, the seller incurs a loss.
For example: If an I-pad is bought at Rs 30,000 and a year later it was sold for Rs 20,000 then the seller made a loss of Rs 10000.
Profit and Loss: Formula, Definition, Examples
Profit and Loss: Profit is the positive difference between the selling price and the cost price of an item, indicating a gain or financial benefit. It is calculated by subtracting the cost price from the selling price. Conversely, loss occurs when the selling price is less than the cost price, resulting in a negative difference. The formula for calculating profit is SP – CP, while the formula for calculating loss is CP – SP.
This article explores all the concepts related to Profit and Loss, whether it’s their formula or their percentage formula. Here we will also learn about the marked-up price and discount.
Table of Content
- What are Profit and Loss?
- Basic Concepts of Profit and Loss
- Cost Price (CP)
- Cost Price Formula
- Selling Price (SP)
- Selling Price Formula
- Marked Price (MP)
- Marked Price Formula
- Profit and Loss
- Profit (P)
- Loss (L)
- Profit and Loss Formula
- Profit Formula
- Loss Formula
- Discount Formula
- Profit and Loss Examples
- Profit and Loss – Percentage Formula
- Profit Percentage
- Loss Percentage
- Discount Percentage
- Profit and Loss Tricks
- How to Calculate Profit and Loss?
- Summarizing Important Formulas – Profit and Loss
- Profit and Loss Solved Examples
- Practice Questions – Profit and Loss
Contact Us