What is Profit and Loss?
Profit means the gain you had when your selling price of product is greater than its cost price and on the other hand Loss means the money you lost on product when its selling price is less than the cost price.
Formula for Profit and Loss
Profit = Selling Price – Cost Price
Loss = Cost Price – Selling Price
For Example, if you bought a shirt for 200 and sold it to your friend for 150, you had a Loss of (200 – 150) = 50. If you had sold it for 300, you would have a Profit of (300 – 200) = 100.
Real-Life Applications of Profit and Loss
Profit and loss (P&L) refers to the financial statement that summarizes the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year. It is an important concept for business and accounting, but it is not only used in professional settings but also used in everyday life.
It is calculated to know the difference between the selling price and cost price thus giving us the idea of gain and loss in business or any other aspects of our life. In this article, you will learn the various applications of Profit and Loss.
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