Question
GeneralGeneralGeneral

what is the formula of profit and loss

Verified Answer

Profit and loss formulas are used in mathematics and commerce to calculate gain or loss in business transactions. These formulas are based on the cost price (CP) and selling price (SP) of an item.

Basic Profit and Loss Formulas

Concept Formula
Profit SP − CP
Loss CP − SP
Profit Percentage (Profit ÷ CP) × 100
Loss Percentage (Loss ÷ CP) × 100

Where:

  • CP = Cost Price

  • SP = Selling Price

Conditions

  • If SP > CP → Profit

  • If CP > SP → Loss

Example:
If the cost price of an item is ₹500 and the selling price is ₹600:

Profit = 600 − 500 = ₹100
Profit % = (100 ÷ 500) × 100 = 20%

In conclusion, profit and loss formulas help calculate business gain, loss, and percentage values using cost price and selling price.