To make profit is the basic aim of any business.

**Cost Price: **It is the price at which any article or unit or item is bought. It is abbreviated as CP.

**Selling Price:** It is the price at which any article or unit or item is sold. It is abbreviated as SP.

**Profit: **If Selling Price is greater than Cost Price then seller makes profit.

Profit = SP – CP

**Loss:** If Cost Price is greater than Selling Price then seller incurs loss.

Loss = CP – SP

## Basic Formulas of Profit and Loss

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One point is to be noted that loss or profit is always calculated with reference to CP.

Short Cut Methods for Profit and Loss>>