Profit and loss

In its simplest sense, profit is the money made after expenses. If the expenses are more than the money received then it's considered a loss.

A profit is a positive number and a loss is a negative number.

Example

John buys items from a car boot sale. He then sells the items on an internet auction site.

The table shows some information about the items that John has bought and sold in a week.

ItemBoughtSoldProfit or loss
CD£5.00£7.50£2.50 profit
Board game£7.00£10.00
Toy car£1.00£1.20 profit
Jigsaw£12.00£5.00 loss
DVD£9.00£7.50

Fill in the missing gaps and work out the total profit or loss for the five items.

  • Board game: The difference between the bought and sold prices is £3.00. As the item was sold for more than it was bought, it represents £3.00 profit.
  • Toy car: The item was bought for £1.00 and had a £1.20 profit when it was sold. This means the item was sold for more than it was bought. So \pounds 1.00 + \pounds 1.20 = \pounds 2.20.
  • Jigsaw: The item was sold for £12.00 and this was a £5.00 loss. This means the item was sold for less than it was bought. So \pounds 12.00 + \pounds 5.00 = \pounds 17.00.
  • DVD: The difference between the bought and sold prices is £1.50. As the item was sold for less than it was bought it represents £1.50 loss.

By considering the profit and loss of the 5 items as positive and negative numbers, the items represent: +2.5 +3 +1.2 -5 -1.5 = +0.2

So overall it's a profit of £0.20 or 20 p.