Profit & Loss — Absolute explained through a friendly whiteboard conversation, examples, visuals, and practice for school students.
Step 1
Notes
Step 2
Formulae
Step 3
Examples
Step 4
Practice
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Profit and loss compare the cost price and the selling price of an item.
This topic helps students understand buying, selling, and simple business calculations.
It is used in shops, bills, discounts, markets, and everyday money decisions.
Cost price is the price paid to buy or make an item. It is often shortened to CP.
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Profit happens when SP is greater than CP.
Loss happens when SP is less than CP.
The amount of profit or loss is the difference between the two prices.
Meaning: Cost price is the amount paid for an item.
Definition: Cost price, or CP, is the price at which an item is bought.
If a shopkeeper buys a bag for Rs 500, the cost price is Rs 500.
Meaning: Selling price is the amount received for an item.
Definition: Selling price, or SP, is the price at which an item is sold.
If the bag is sold for Rs 650, the selling price is Rs 650.
Meaning: Profit is money gained in a sale.
Definition: Profielling pricost price, when SP is greater than CP.
If Cs 500 and Ss 650, profis 150.
Meaning: Loss is money lost in a sale.
Definition: Losost pricelling price, when CP is greater than SP.
If Cs 500 and Ss 420, loss 80.
Meaning:
Easy
Question: An item is bought for Rs 250 and sold for Rs 310. Find the profit.
Medium
Question: A watch is bought for Rs 900 and sold for Rs 760. Find the loss.
Exam-level
Question: A toy is sold for Rs 480 at a profit of Rs 75. Find its cost price.
Subtracting in the wrong order
Why it happens: CP and SP are not identified first.
Correct approach: Write CP and SP before subtracting.
Calling every difference profit
Why it happens: The larger price is not checked.
Correct approach: Profit only happens when SP is greater than CP.
Dropping the money unit
Why it happens: Only arithmetic is written.
Correct approach: Write Rs, dollars, or the unit used in the question.
What is cost price?
Cost price is the price paid to buy or make an item.
What is selling price?
Selling price is the price received when the item is sold.
Can profit and loss happen at the same time?
No. For one sale, the item gives profit, loss, or neither.
Practise the same concept from this article. Your student profile may guide entitlement and follop recommendations, but it does not replace this concept.
Definition: Use the profit or loss relationship to find the missing value.
If Cs 300 and profis 50, then Ss 350.