💰 Profit & Loss

Understanding business transactions and financial outcomes

🎯 What You'll Learn

Understand the concepts of cost price, selling price, profit, and loss
Calculate profit and loss amounts and percentages
Identify break-even points in business
Apply profit and loss concepts to real-world scenarios

🌟 Why It Matters

Profit and loss calculations are essential for business decisions, personal finance, shopping comparisons, and understanding how businesses work. These skills help in evaluating investments and making smart financial choices.

📊 Key Concepts

Cost Price (CP)

The amount paid to buy or make an item. This is your starting investment.

The money you spend

Selling Price (SP)

The amount received when selling an item. This is what the customer pays.

The money you receive

Profit

When selling price is greater than cost price. You made money!

Profit = SP - CP

Loss

When selling price is less than cost price. You lost money.

Loss = CP - SP

📈 Profit vs Loss

✅ Profit Situation

When: Selling Price > Cost Price

Example:
Cost Price: £50
Selling Price: £75
Result: £25 profit

Profit = £75 - £50 = £25

❌ Loss Situation

When: Selling Price < Cost Price

Example:
Cost Price: £80
Selling Price: £60
Result: £20 loss

Loss = £80 - £60 = £20

🧮 Profit & Loss Calculator

Cost Price (£)

Selling Price (£)

Outcome: £20 Profit

Profit/Loss %: 20%

Status: Good Deal! 👍

Step 1: Compare prices

Selling Price (£120) > Cost Price (£100)

Step 2: Calculate profit

Profit = £120 - £100 = £20

Step 3: Calculate percentage

Profit % = (£20 ÷ £100) × 100 = 20%

📊 Profit & Loss Percentages

Profit Percentage

Profit % = (Profit ÷ Cost Price) × 100

Example: £10 profit on £50 cost
= (£10 ÷ £50) × 100 = 20% profit

Loss Percentage

Loss % = (Loss ÷ Cost Price) × 100

Example: £15 loss on £75 cost
= (£15 ÷ £75) × 100 = 20% loss

⚖️ Break-Even Point

Break-even occurs when Selling Price equals Cost Price. There's no profit and no loss - you just get your money back.

Break-Even Example:
Cost Price: £60
Selling Price: £60
Result: £0 profit, £0 loss

You neither gained nor lost money in this transaction.

🌍 Real-World Applications

🛍️ Shopping & Reselling

You buy a bike for £150 and sell it for £180. What's your profit and profit percentage?

Profit = £180 - £150 = £30
Profit % = (£30 ÷ £150) × 100 = 20%

£30 profit (20%)

💼 Small Business

A shop buys products for £40 each and sells them for £35. What's the loss per item?

Loss = £40 - £35 = £5
Loss % = (£5 ÷ £40) × 100 = 12.5%

£5 loss (12.5%)

📱 Electronics Trade

You trade in a phone for £200 that you originally paid £250 for. Calculate your loss.

Loss = £250 - £200 = £50
Loss % = (£50 ÷ £250) × 100 = 20%

£50 loss (20%)

🏠 Property Investment

An investor buys a house for £300,000 and sells it for £360,000. What's the profit?

Profit = £360,000 - £300,000 = £60,000
Profit % = (£60,000 ÷ £300,000) × 100 = 20%

£60,000 profit (20%)

💪 Practice Exercises

1. Find the profit: Cost Price £80, Selling Price £95

Profit = Selling Price - Cost Price. So £95 - £80 = ?

2. Calculate loss percentage: Cost £50, Selling Price £40

First find loss: £50 - £40 = £10. Then: Loss % = (£10 ÷ £50) × 100

3. What's the selling price for 25% profit on £120 cost?

25% profit means selling for 125% of cost price. 125% of £120 = £120 × 1.25

4. If cost is £200 and loss is £30, what's the selling price?

If there's a £30 loss, the selling price is £30 less than cost price. £200 - £30 = ?

5. Find profit percentage: Cost £75, Selling Price £90

Profit = £90 - £75 = £15. Profit % = (£15 ÷ £75) × 100