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Home >> Profit and Loss >> Profit >>

Define Profit : Profit = SP - CP

Profit Loss Profit Percentage Loss Percentage Discount

What is Profit ?
When a seller sells a product at a price which is more than his C.P.(cost price), then the seller earns profit/gain.

In other words, when the selling price of a thing is more than its cost price, then profit occurs.
Or we can also represent it as:

If SP > CP, then profit is made

Mathematic formula for Profit is :-
Profit = SP – CP

Let’s understand this with the help of following example:

Example: Cost price of shirt is $ 15 and selling price is $18, find whether the shopkeeper earns profit or suffer loss. Also find value of profit or loss.
Solution: As per the given question:

Cost Price or CP = $ 15 ………….(statement 1)
Selling Price or SP = $18…………(statement 2)

Now, we know that if SP > CP, then profit is made.
From statement 1 and 2, we get:
Since, $18 > $15

So, it clear that Shopkeeper earns a profit.

Now to find the value of Profit, use the following formula:
Profit = SP – CP

Put values from statement 1 and 2 & we get:
Profit = $18 – $15

Solve Subtraction expression on L.H.S. of equation and we get:

Profit = $3

Hence, shopkeeper earns a profit of $3




Find Cost price when selling price and profit is given.

In some problems or question we are given selling price of a commodity and the profit which seller earns by selling that commodity. And we are asked to find the cost price.

In such cases we use the above explained formula

i.e. Profit = selling price - cost price,

only difference is of procedure for calculating CP.

Read the following example for better understanding:

Example : A toy is sold at a price of $16 and profit earned is $2. Find the cost price at which toy is bought ?
Solution: As per the given question, we get:

SP = $16................( statement 1)

Profit = $2.......(statement 2)

CP is to be calculated.

Apply the formula:

Profit = SP - CP

Put values from above statement 1 & 2 and we get:

2 = 16 - CP

Subtract 16 from sides and we get:

-14 = -CP

Divide both sides by (-1) and we get:

14 = CP

Or we can also write it as:

CP = 14




Find selling price when cost price and profit is given.

In some problems or question we are given cost price of a commodity and the profit which seller earns by selling that commodity. And we are asked to find the selling price.

In such cases we use the above explained formula

i.e. Profit = selling price - cost price,

only difference is of procedure for calculating SP.

Read the following example for better understanding:

Example : A dress is purchased at a price of $16. Find the selling price at which toy could be sold so that seller earns a profit of $5 ?
solution: As per the given question, we get:

CP = $16................( statement 1)

Profit = $5.......(statement 2)

SP is to be calculated.

Apply the formula:

Profit = SP - CP

Put values from above statement 1 & 2 and we get:

5 = SP - 16

Add 16 to both sides and we get:

21 = SP

Or we can also write it as:

SP = 21


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