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<\/p>\nProfit & Loss<\/b><\/p>\n
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We often come across these newspaper headlines-<\/p>\n
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What do they signify?\u00a0What is meant by profit and loss?<\/b><\/p>\n
Profit\u00a0<\/b>is a monetary gain earned from any transaction where selling price is more than the cost price.\u00a0Loss\u00a0<\/b>is the expense incurred by the seller where cost price is more than selling price.<\/p>\n
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But then what is selling price and cost price?<\/b><\/p>\n
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Let us look at an example-<\/p>\n
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John is a vendor who sells fruits. He buys them from the wholesale market and sells them to his customers.<\/p>\n
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The\u00a0price at which John buys fruits from the wholesale market is called its cost price<\/b>\u00a0i.e.\u00a0how much cost did John incur to buy the fruits.<\/p>\n
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The\u00a0price at which John sells the fruits to his customers is called its selling price<\/b>\u00a0i.e.\u00a0at what price did John sell the fruits.<\/p>\n
But why will he buy something which he wants to sell? This is because he wants to earn money. But how?<\/p>\n
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He buys the fruits at a lower price from the market and sells them at a higher price to his customers.<\/p>\n
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The difference between these prices is his gain or the profit he has earned on selling.<\/p>\n
When the\u00a0S.P > C.P, there is a profit<\/b><\/p>\n
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Profit = Selling Price \u2013 Cost Price<\/b><\/p>\n
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Alternatively, Cost Price = Selling Price \u2013 Profit<\/p>\n
And\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Selling Price =\u00a0Cost Price + Profit<\/p>\n
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But what if he sold at a lower price and bought at a high price from the wholesale market.<\/p>\n
This is the case where he would have incurred a loss. Loss is nothing but cost incurred without getting anything in return.<\/p>\n
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When the\u00a0C.P > S.P, there is a loss<\/b><\/p>\n
![\"\"](\"https:\/\/kapdec.com\/help\/venture\/wp-content\/uploads\/2025\/10\/3-1-300x51.png\")
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Loss = Cost Price \u2013 Selling Price<\/b><\/p>\n
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Alternatively, Cost Price = Selling Price + Loss<\/p>\n
And\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Selling Price = Cost Price – Loss<\/p>\n
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If\u00a0S.P = C.P<\/b>, then it is neither profit nor loss\u00a0i.e.\u00a0S.P \u2013 C.P = 0\u00a0and this point is called\u00a0breakeven point.<\/b><\/p>\n
Examples-<\/b><\/p>\n <\/p>\n Solution<\/b><\/p>\n C.P of the clock = Rs. 590<\/p>\n S.P of the clock = Rs. 620<\/p>\n Since, S.P > C.P, so Sam will incur a profit.<\/p>\n <\/p>\n Profit of Sam = Rs. 620 \u2013 590 = Rs. 30<\/p>\n Thus, Sam had a profit of Rs. 30.<\/p>\n <\/p>\n <\/p>\n <\/p>\n Solution<\/b><\/p>\n C.P of the washing machine = Rs. 9130<\/p>\n S.P of the washing machine = Rs. 8790<\/p>\n Since, C.P > S.P, so Kevin will incur a loss.<\/p>\n <\/p>\n Loss of Kevin = Rs. 9130 \u2013 8790 = Rs. 340<\/p>\n Thus, Kevin had a loss of Rs. 340.<\/p>\n <\/p>\n <\/p>\n <\/p>\n Solution<\/b><\/p>\n S.P of the book = Rs. 320<\/p>\n Profit = Rs. 60<\/p>\n C.P of the book = S.P \u2013 Profit = Rs. 320 \u2013 60 = Rs. 260<\/p>\n Thus,\u00a0C.P of the book was\u00a0Rs.\u00a0260.<\/p>\n <\/p>\n <\/p>\n <\/p>\n Solution<\/b><\/p>\n C.P of the\u00a0sack of rice\u00a0= Rs.\u00a01920<\/p>\n Transportation Cost = Rs. 60<\/p>\n Transportation cost is an overhead expense for Jack. These are the expenses incurred over and above the original cost to get the product to the place of sell or to make additions to the product to be able to sale it.<\/p>\n <\/p>\n Now, Total C.P = Rs. 1920 + 60 = Rs. 1980<\/p>\n S.P of the\u00a0sack of rice\u00a0= Rs.\u00a02020<\/p>\n Since, S.P > C.P, so\u00a0Jack\u00a0will incur a profit.<\/p>\n <\/p>\n Profit of\u00a0Jack\u00a0= Rs.\u00a02020 \u2013\u00a01980 = Rs.\u00a040<\/p>\n Thus,\u00a0Jack\u00a0had a profit of Rs.\u00a040.<\/p>\n <\/p>\n <\/p>\n <\/p>\n Did you know??<\/b><\/p>\n <\/p>\n <\/p>\n Profit & Loss We often come across these newspaper headlines- Company X shut down because of a heavy loss Film XYZ released last week made a huge profit on the first day of its release. What do they signify?\u00a0What is meant by profit and loss? Profit\u00a0is a monetary gain earned from […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[590],"tags":[595],"class_list":["post-856","post","type-post","status-publish","format-standard","hentry","category-grade-5","tag-grade-5-mathematics"],"_links":{"self":[{"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/posts\/856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/comments?post=856"}],"version-history":[{"count":1,"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/posts\/856\/revisions"}],"predecessor-version":[{"id":1529,"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/posts\/856\/revisions\/1529"}],"wp:attachment":[{"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/media?parent=856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/categories?post=856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kapdec.com\/help\/wp-json\/wp\/v2\/tags?post=856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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\n1, 1, 2, 3, 5, 8, 13, 21, 34, and so on<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"