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Profit and Loss: Concept, Formulas,Solved examples and Worksheets

you might go to market to purchase your stationary or any other items, Sometimes what happens is the vendor sells you the item at a price higher than its maximum retail price , and you end up paying an extra amount of x.if you are facing a loss so the vendor must be getting profit.These are the simple terms what we commonly use while purchasing and selling something. By means of this article you will be building a strong foundation in  Profit & Loss as well as  you will be solving complex problems in a matter of minutes. Let's get started

profit and loss


What is Profit and Loss 

Before we talk of Profit and Loss let me introduce you  with some new terms that we will be making use of most of the times in this chapter.

Cost Price :  It is the amount that we pay to puchase an item or items.If you pay $5 for a pen so it will be its cost price.We say it C.P in short.

Selling price :  It is the amount we will be getting when we sell our purchased item.we call it S.P in short

Now you are familiar with C.P and S.P, let's define Profit & Loss

Profit : When cost price of an article is less than its selling price then it is called a profit.

Example 1: Suppose angela buys 15 kg rice for $12 and sells it for $15. we can say that angela made a profit of $3. 

Profit = S.P -C.P 
           = $15 - $12 
           = $3

Whenever C.P is subtracted from S.P we get a  + ve number in the case of Profit.


Example 2 : Dyna brings a packet of 15 pens for $2 each and sell the packet at $45 .

Profit = S.P of 15 pens - C.P of 15 pens
           = $45 - $15×2
          = $15

Loss : When the cost price of an article is more than that of its cost price then it is called a Loss.

Example 1 : John pays $500 for a painting and sells it for $400 to Mike.
We can say that John faces a loss of $100 .

Loss = S.P -C.P
         = $400-$500
         = -$100

Minus sign indicates a loss.

Example 2 : A man pays £100 for his spectacles while it costs the vendor for £150.

Profit = S.P -C.P 
           = £100 - £150
           = -£50
The vendor incurred a loss of  £50


Marked Price : A price at which a seller gets profit even after giving discount on it.

Suppose, Marked Price of an article is $150 and its cost price is $100 .The seller sold it at 40% discount then what would be the selling price of the article and the profit earned by the Seller 

Marked Price=$50
Discount.       = $50×40% 
                        = $50×40/100
                        = $20

Selling price of the article= $150- $20
                                               =$130

Profit Earned by the Seller /Markup

= $130 -$100
= $30

Profit percent of the seller 
= Profit/Cost price ×100
= ($30/$100)×100
= 30%

Profit and loss Formulae 

  • Profit = S.P  - C.P
  • Loss = C.P - S.P
  • Profit Percentage = Profit/ C.P ×100
  • Loss Percentage = Loss/C.P ×100
  • % Markup = (Markup/Cost price)×100
Markup = Marked Price 



Profit and loss worksheets

Here are given some Solved and unsolved worksheets that will help you consolidate you concepts.






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