Profit and loss- Everything you need to know.

Introduction:
This chapter is a very base for business mathematics and is very relevant to your day-to-day life.
Hence it is frequently asked in various exam to test your basics mathematics. The main aim of
the business is to earn profit in order to survive in the competition. Whether it be a person
selling tea in your neighbor hood or it be a branded company like Nike, the main aim of them is
to generate revenue in order to earn profit and hence this makes the topic very relevant. The
calculation part of calculating profit or loss is introduced in order to enhance your reasoning
power but is less relevant to day-to-day life because of various tools embed by technology
around us.

Let us get started and I hope you are interested to enter into very new chapter and aspect of
Math.
Let us understand few terms first.
1) Cost price: It is the total cost incurred to make or resell the product. For example: If it
takes me $2 to make a pen which I can sell it ahead then my cost price would be $2.
2) Selling price: It is the price at which I am selling the product or service to the customer.
Example: If I am selling the pen at $5 then my selling price would be $5. It can also be
called Invoice price i.e. actual price customer pays to receive the goods.
3) List Price: It is the price at product listed on the store. However, List price and selling
price can be different due to various discounts offered by the seller. Example: The shoes
is listed at $200 whereas seller offer you at $180. Here $200 is the list price and $180 is
an Invoice price. $20 is discount.
Let us derive some formulae from above statements.
1) Cost price + profit= selling price.
Example: It took me $100 to make a smart phone and I want $50 above on that as a
profit so I sell it at $150.
CP+P=SP
$100+$50=$150.
2) Cost price- loss= Selling price.
CP-L=SP
Let us say I sell a watch $120 due to it off season and I incur a loss of $80 on it then my
cost price is $200.
CP-L=SP
CP-$80=$120
CP=$120+$80
CP=$200.