This slide show is particular for CBSE/NCERT [grade 5-6] for understanding the concept of profit and loss.

1. The situations described in this topic are
from the point of view of the person selling
something to someone else.
The 'cost price' is how much the item
cost the shop owner.
The 'selling price' is what he is selling it
for.
If the shop sells a thing for more than
they paid for it, then the difference is
the 'profit':

2. profit = selling price - cost price
If the shop sells a thing for less than they
paid for it, then the difference is the 'loss':
loss = cost price - selling price
Let us learn more about profit and loss
through an example :
Mr.Ravi is a shopkeeper, he bought some things
for his shop:

3. sold it for Rs.25,Rs.48,Rs.32 and Rs.40.So in this case Mr.Ravi got
a Profit .If he sells these items to Rs.15,Rs.35,Rs.22 and Rs20 , it
would have been a Loss in his business.
A santa
claus mask
C.P:Rs.20
A toy
bus
C.P:Rs.40
A candle
box
C.P:Rs.30
A toy car
C.P:Rs.35

4. Apart from the
Cost price the shopkeeper asks additional
Charges for transport , labour etc. These are
Called overhead expenses.

5. The use of profit and loss not only help us in our every day
life but also in Buisness etc ..
Let us learn some formulaes
Gain % =
Gain x 100
C.P.C.P.
•Gain = (S.P.) - (C.P.)
•Loss = (C.P.) - (S.P.)
•Loss or gain is always reckoned on
C.P.
•Gain Percentage: (Gain %)
•Selling Price: (S.P.)
Gain % =
Gain x
100
C.P.

6. SP =
(Los
s
%)
x C.P.
100
C.P. =
100
x S.P.
(100
+
Gain
%)
•Loss Percentage: (Loss %)
•Selling Price: (S.P.)
•Cost Price: (C.P.)

7. Super normal profit is the excess over normal
profit. It is known as abnormal or excess
profit. It may be earned only when the market
is imperfect. It is considered a differential
surplus in the nature or rent. Wind fall profits
due to unforeseen changes in demand and
supply conditions like the occurrence of
natural calamities and declaration of war,
monopoly profits due to absence of
competition and profits due to differential
ability of the entrepreneur are examples of
super-normal profits.
The basic assumption here is that firms are profit
maximizing.

8. A loss function or cost function is a function that
maps an event or values of one or more variables
onto a real number intuitively representing some
"cost" associated with the event. An optimization
problem seeks to minimize a loss function.
An objective function is either a loss function or its
negative (sometimes called a reward function or
a utility function), in which case it is to be maximized.
In statistics, typically a loss function is used
for parameter estimation, and the event in question is
some function of the difference between estimated
and true values for an instance of data. The concept,
as old as Laplace, was reintroduced in statistics
by Abraham Wald in the middle of the 20th Century.

9. In the context of economics, for example, this is usually economic
cost or regret. In classification, it is the penalty for an incorrect classification
of an example. In actuarial science, it is used in an insurance context to
model benefits paid over premiums, particularly since the works of Harald
Cramér in the 1920s.[2] In optimal control the loss is the penalty for failing to
achieve a desired value. In financial risk management the function is
precisely mapped to a monetary loss.

10. A Balance sheet means ,the amount of profit is exactly same
as the amount of loss .
There fore ,balanced sheet :PROFIT = LOSS