Profit and Loss

Profit

If the selling price of an article is more than its cost price, then the dealer (or shopkeeper) makes a profit (or gain).

Loss

If the selling price of an article is less than its cost price, the dealer suffers a loss.

Some Basic Concepts of Profit and Loss

Selling Price (SP) – The price at which the shopkeeper sells the goods is called the selling price (SP) of the goods sold by the shopkeeper to the customer.

Cost Price (CP) - The money paid by the shopkeeper to the manufacturer or whole-seller to buy goods is called the cost price (CP) of the goods purchased by the shopkeeper.

Marked Price (MP) - Marked price is the price set up by the seller on the article. Marked price is also known as the list price. It is the price that a seller sets up for the purchaser on which he later applies a discount.

Discount: A discount is a reduction in the market price of a product that is offered to a customer.

Some Important Formulas

Here are some of the important formulas used in calculating the profit and loss percentage. It is used to express the profit or loss incurred in % form.