Algebra Den

Profit and Loss

Before you study how to calculate Profit / Loss, you must study the following terms:-

Definition ----- Cost Price :-
When a seller buys a thing with the purpose of re-selling and the amount paid by him is called Cost Price of the seller. Cost Price is also denoted as C.P.

Definition ----- Selling Price termed as S.P. :-
When a thing is sold and the consumer/customer buys it by paying a particular amount, this particular amount is termed as Selling Price of the seller. Selling Price is also denoted as S.P.


Definition ----- Overhead Expenses/Charges :-
Sometimes, seller has to bear some extra/additional expenses when he buys a product, all such expenses are refered as Overhead Expenses/Charges


Now, you can learn how to calculate Profit and Loss

Definition ----- Profit :-
When a seller sells a product at a price which is more that 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.
Mathematic formula for Profit is :-
Profit = S.P. - C.P.

Definition ----- Loss :-
When a seller sells a product at a price which is less that his C.P.(cost price), then the seller makes losses.
In other words, when the selling price of a thing is less than its cost price, then loss occurs.
Mathematic formula for Loss is :-
Loss = C.P. - S.P.