Profit and Loss - Orchids The International School
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Money

Profit and Loss

Terms related to profit and Loss

  1. Cost Price: It is defined as the amount at which the product/article is bought or the amount which is invested to make a product.
    • The cost price is abbreviated as “CP”.
  2. Selling Price:It is defined as the amount at which the product/ article is sold.
    • The selling price is abbreviated as “SP”.
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CONDITIONS:

  • Cost Price is less than selling price.
    • C.P < S.P
  • Cost price is more than the selling price.
    • C.P > S.P
  • Cost price is equal to the selling price.
    • C.P = S.P
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Profit

  • Profit means gain in amount when any product is sold.
  • When the cost price is less than the selling price then we earn profit.
  • Profit is calculated by subtracting the cost price from the selling price.
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Example :

The cost price of the article is Rs 55 and the selling price is Rs 65. Find the profit.

Solution:

The cost price is Rs 55.
The selling price is Rs 65.
Since, the selling price is more than the cost price then there is a profit.
Subtract 55 from 65 to get the profit.
65 – 55 = 10
Therefore, profit = Rs 10.

Loss

  • Loss means losing an amount when any product is sold.
  • When the cost price is more than the selling price then we suffer loss.
  • Loss is calculated by subtracting the selling price from the cost price.
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Example : The cost price of the article is Rs 100 and the selling price is Rs 85. Find the loss.

Solution:

The cost price is Rs 100.
The selling price is Rs 85.
Since, the selling price is less than the cost price then there is a loss.
Subtract 85 from 100 to get the loss.
100 – 85 = 15
Therefore, loss = Rs 15.

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