Profit and loss

When you buy and sell items there are costs or expenses involved. 

Example

I sell baskets on marketplace for \($8\) each. If I sell 1 basket will I make a profit on it? To answer this question we must consider how much it costs me to buy the basket. This is called the cost price of a sale. If the cost price of the basket is \($5\) then I will make \($8-$5=$3\). So, I will make a profit on the basket since the selling price is greater than the cost price. 

I can also calculate the percentage profit made on the sale of 1 basket as follows: \(\frac{3}{5}\times 100=60%\)

Profit: If the money received is more than the expenses or the initial costs, then you make a profit. 

\(Profit = Selling  price - cost  price\)

Loss: If the money received is less than the expenses or initial costs, then you make a loss.

\(Loss = Cost  price - selling  price\)

No matter which currency is used the method for calculating profit or loss is the same.

This video will go over a few more examples of profit and loss. Try the activity that follows the video to make sure you understand the concepts of profit and loss.