Profit vs Loss — Difference (with Table & FAQs)
Profit vs Loss compared side by side — a 6-row comparison table, 4 key points and 3 exam FAQs. Class 8 Social Science, free and no sign-up.
TL;DR: Profit vs Loss compared side by side — a 6-row comparison table, 4 key points and 3 exam FAQs. Class 8 Social Science, free and no sign-up.
Written & reviewed by the Syllab.in Academic Team (CBSE/NCERT subject experts) · Updated
The main difference between Profit and Loss: Profit occurs when selling price exceeds cost price. Loss occurs when cost price exceeds selling price.
Profit vs Loss — Comparison Table
| Basis | Profit | Loss |
|---|---|---|
| Definition | Selling price greater than cost | Cost price greater than selling price |
| Formula | SP - CP (positive) | CP - SP (positive) |
| Percentage | Profit % = (Profit/CP) x 100 | Loss % = (Loss/CP) x 100 |
| Business Impact | Business grows and expands | Business shrinks and fails |
| Example | Buy pen for Rs 5, sell for Rs 10 | Buy pen for Rs 10, sell for Rs 5 |
| Cash Flow | Positive, money increases | Negative, money decreases |
Key Points
- Profit is the gain from a business transaction
- Loss is the reduction in value
- Both are calculated from cost and selling prices
- Profit margin shows efficiency of business
Frequently Asked Questions
What is the difference between profit and loss?
Profit occurs when the selling price is greater than the cost price, and equals selling price minus cost price. Loss occurs when the selling price is less than the cost price, and equals cost price minus selling price.
How is profit percentage calculated?
Profit percentage is the profit expressed as a percentage of the cost price: profit divided by cost price, multiplied by 100. Loss percentage is calculated the same way, on the cost price rather than the selling price.
Why is the percentage always taken on the cost price?
Because the cost price is what was actually invested, so it is the fair basis for judging the return. Taking the percentage on the selling price would give a different and misleading figure.