Profit and Loss Cheat Sheet

Key Definitions

• Cost Price (CP): Price at which an item is purchased. ✅

• Selling Price (SP): Price at which an item is sold. ✅

• Profit: SP - CP. ✅

• Loss: CP - SP. ✅

• Profit Percentage: (Profit / CP) * 100. ✅

• Loss Percentage: (Loss / CP) * 100. ✅

Important Concepts

Profit and Loss Basics

• If SP > CP, then Profit occurs.

• If SP < CP, then Loss occurs.

Profit and Loss Relationships

• Profit = SP - CP

• Loss = CP - SP

Key Formulas

Common Mistakes to Avoid

Common Mistake: Confusing profit and loss percentages. Always relate them to Cost Price (CP).

Memory Tricks

Tip: "CPSP" — Cost Price, Selling Price — Remember the order for calculations.

Key Diagrams

+------------------+
|   Cost Price     | 
|        CP        | 
+------------------+
        |
        | (SP > CP)
        v
+------------------+
|   Selling Price   |
|        SP        |
+------------------+
        |
        | (Profit)
        v
+------------------+
|      Profit      |
+------------------+

+------------------+
|   Cost Price     | 
|        CP        | 
+------------------+
        |
        | (SP < CP)
        v
+------------------+
|   Selling Price   |
|        SP        |
+------------------+
        |
        | (Loss)
        v
+------------------+
|       Loss       |
+------------------+