Profit and Loss Examples
- Sarah decides to open her own coffee shop. She calculates her monthly expenses for rent, utilities, wages, and supplies to be $8,000. In the first month, her coffee shop generates $10,000 in sales. Therefore, Sarah’s profit for the month is calculated as Sales – Expenses = $10,000 – $8,000 = $2,000. However, if in the following month, sales drop to $7,000 due to less foot traffic, her loss would be $8,000 (expenses) – $7,000 (sales) = $1,000.
- Alex buys a used car for $5,000, intending to sell it for a profit. After purchasing, he spends an additional $500 on repairs and improvements. He then sells the car for $6,200. To find his profit, Alex subtracts his total expenses ($5,500) from his sale price, which is $6,200 – $5,500 = $700.
- Jamie, a freelance graphic designer, takes on a project for which she charges $2,000. Her expenses for software subscriptions, internet, and other utilities for the month amount to $300. Therefore, Jamie’s profit from this project is $2,000 (income) – $300 (expenses) = $1,700. If, in a different month, Jamie only secures a project that pays $250, her loss would be her expenses minus her income, or $300 – $250 = $50.
- Mark invests $10,000 in shares of a technology company. Over the year, the value of his investment grows to $12,000, so his profit from this investment would be $12,000 (final value) – $10,000 (initial investment) = $2,000. Conversely, if the market value had dropped and his investment was worth only $9,000 at the end of the year, Mark would face a loss of $10,000 (initial investment) – $9,000 (final value) = $1,000.
Profit and Loss: Formula, Definition, Examples
Profit and Loss: Profit is the positive difference between the selling price and the cost price of an item, indicating a gain or financial benefit. It is calculated by subtracting the cost price from the selling price. Conversely, loss occurs when the selling price is less than the cost price, resulting in a negative difference. The formula for calculating profit is SP – CP, while the formula for calculating loss is CP – SP.
This article explores all the concepts related to Profit and Loss, whether it’s their formula or their percentage formula. Here we will also learn about the marked-up price and discount.
Table of Content
- What are Profit and Loss?
- Basic Concepts of Profit and Loss
- Cost Price (CP)
- Cost Price Formula
- Selling Price (SP)
- Selling Price Formula
- Marked Price (MP)
- Marked Price Formula
- Profit and Loss
- Profit (P)
- Loss (L)
- Profit and Loss Formula
- Profit Formula
- Loss Formula
- Discount Formula
- Profit and Loss Examples
- Profit and Loss – Percentage Formula
- Profit Percentage
- Loss Percentage
- Discount Percentage
- Profit and Loss Tricks
- How to Calculate Profit and Loss?
- Summarizing Important Formulas – Profit and Loss
- Profit and Loss Solved Examples
- Practice Questions – Profit and Loss