When we buy a thing by paying some money and sell it back, then definitely we will be in either in profit or loss. This Profit and Loss depends on selling and cost price. The 'cost price' is that cost which is paid for purchasing an item and selling price is that price which is taken for item in case of selling it.
Profit and Loss Math is very useful in our daily life. Profit and Loss math is also very useful in field of business, finance and other transactions. Profit and Loss math also includes what % of total profit or total loss is gained. Both profit % and loss % are calculated on behalf of cost price.
Hence Profit and Loss Definition can be given as follows:
When selling price is more than that of cost price, then it is called profit. Formally it can be given as Profit = selling price - cost price.
When cost price is more than selling price then it will be known as loss and it can be given as
Loss = cost price - selling price.
Let’s see some Profit and Loss Problems to see that how Profit and Loss depends on selling and cost price.
Suppose a shopkeeper purchases scientific watches paying $20 each. If selling price for each of them is $ 50 then it is clear that cost price of each watch is $20 and selling price is $50.
Profit = selling price (s. p.) - cost price (c. p.),
= $50 - $20,
If shopkeeper sells watches for $10 each and cost price is same for each watch that is $20 then there will be loss and it can be shown as:
Loss = cost price (c. p.) – selling price (s. p.).
= $20 - $10,
When you purchase something by paying some money or some assets and sell it, definitely you will either be in some profit or loss. Profit and loss are based on price in which you purchased and sold. Cost in which you sold the commodity is called selling cost or selling price and cost in which you purchased is called as cost price.
The 'cost price' is that price w...Read More