Aptitude
Introduction to Profit & Loss
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Profit and loss are the terms used to identify whether a deal is profitable or not.
If the selling price is greater than the cost price, then the difference between the selling price and cost price is called profit.
If the selling price is less than the cost price, then the difference between the cost price and the selling price is called loss.
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The price at which a product is purchased is called its cost price.
The price at which a product is sold is called its selling price.
Terms related to Profit and Loss
- Cost Price (C.P.)
- Selling Price (S.P.)
- Profit
- Loss
- Marked Price
- Discount
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The profit percentage (%) or loss percentage (%) is calculated with the help of the following formulas, which show that the profit or loss in a transaction is always calculated on its Cost Price:
Profit = Selling Price - Cost Price
Percentage Profit = $\frac{Profit}{Cost Price} \times 100$
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The profit percentage (%) or loss percentage (%) is calculated with the help of the following formulas, which show that the profit or loss in a transaction is always calculated on its Cost Price:
Loss = Cost Price - Selling Price
Percentage Loss = $\frac{Loss}{Cost Price} \times 100$
