Arithmetic Practice Test: Profit And Loss — Flashcards

Profit and loss are used to determine the price of a commodity and to understand how profitable a business is. 

In business, profit is the difference between a business's income and expenses. A profit and loss statement (P&L) is a summary of a business's income and expenses over a specific period. It's also called an income statement. 
Profit is the amount gained by selling a product for more than its cost price. Loss is the amount incurred by selling a product for less than its cost price. 
The profit formula is SP - CP and the loss formula is CP - SP.