A business cannot run unless it makes profit! Below is the definition of profit and the basic profit and loss formula:

The formula above means, if you are selling a product to a customer, you must take the amount of money it costs to create the product and subtract it from the amount that you are charging the customer. Whatever is left is your profit.

For example, if I buy a pen from a stationery shop for 55p and sell it to my friend for £1, I have made a profit of 45p!

Let’s try another quick example, this time let’s try to work out the answer:

Let’s work it out together:

On the link below is a document with some profit and loss scenarios. Let’s see if you can calculate the profit correctly for each scenario. You can also print the worksheet on the second link and record your answers on it or read the scenarios onscreen and record calculations and answers on your own piece of paper:

5 ProfitLoss Scenarios

Profit Matters Worksheet

Click on the link below for a presentation revealing the answers to each scenario:

ProfitLoss Answers