What is Profit and Loss? Describe with example
In mathematics, profit and loss refer to the financial outcomes of business transactions or investments. They are fundamental concepts in finance and accounting, providing insight into the success or failure of ventures. Let's delve deeper into each concept with examples:
Profit:
Profit is the financial gain realized when the revenue generated from selling goods or services exceeds the total expenses incurred in producing or acquiring those goods or services. It represents the positive difference between income and expenditure.
Example of Profit:
Suppose you run a lemonade stand. Your total revenue from selling lemonade for a day is $100. However, you had to spend $60 on ingredients (lemons, sugar, water) and other expenses (cups, signage). To calculate your profit, you subtract your expenses from your revenue:
Profit = Revenue - Expenses Profit = $100 - $60 Profit = $40
In this example, your profit from the day's sales is $40.
Loss:
Loss, on the other hand, occurs when the expenses incurred exceed the revenue generated. It represents a negative difference between income and expenditure, indicating that the business or investment did not generate enough revenue to cover its costs.
Example of Loss:
Continuing with the lemonade stand example, let's say that on a rainy day, you only manage to sell $30 worth of lemonade. However, your expenses remain the same at $60. To calculate your loss, you subtract your revenue from your expenses:
Loss = Revenue - Expenses Loss = $30 - $60 Loss = -$30
In this scenario, your loss from the day's sales is $30. The negative sign indicates that your expenses exceeded your revenue, resulting in a loss.
Q1) A shopkeeper gives discount of 25% on a toy and still makes a profit of 20%., He gain Rs.360 then find marked price of toy.
Let find the cost price of the toy
So the formula of the cost price will be
CP = profit /profit% * 100
= 360/20*100
= Rs. 1800
Now
SP = (100+profit % / 100 )* cp
=( 100+20/100)*1800
= (120/100)*1800
=Rs. 2160
Now
Marked Price = (100/100-discount%)*SP
= (100/100-25)*2160
= 100/75*2160
= Rs 2880
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