To calculate profit and loss, you need to consider the following formula:
\[ \text{Profit} = \text{Revenue} - \text{Cost} \]
Where:
- Profit is the amount gained after deducting all costs from revenue.
- Revenue is the total income generated from sales or services.
- Cost is the total expense incurred to produce goods or provide services.
If the calculated profit is positive, it indicates a profit. If the result is negative, it represents a loss.
To calculate profit and loss, you need to determine the total revenue earned and the total costs incurred. Subtracting the total cost from the total revenue will give you the profit or loss amount.
Remember to include all relevant costs such as production costs, operating expenses, taxes, and any other expenses incurred in the business operations when calculating the total cost.
By applying the profit and loss formula correctly and accurately accounting for all revenues and costs, you can determine the financial performance of a business or an investment.
