Let's again look at what Profit and Lost Profit is; Profit and loss profit refer to the financial gain or loss made by an investor in the stock market. So here's a breakdown of it¹:
- *Profit*: When you sell a stock at a higher price than the purchase price, you've made a profit. The formula to calculate profit is: Profit = (Sale Price – Purchase Price) * Number of Shares. For example, if you bought 100 shares at $10 per share and sold them at $15 per share, your profit would be $500.
- *Loss*: When you sell a stock at a lower price than the purchase price, you've incurred a loss. The formula to calculate loss is: Loss = (Purchase Price – Sale Price) * Number of Shares. For instance, if you bought 200 shares at $20 per share and sold them at $15 per share, your loss would be $1,000.
Then to calculate your profit or lost, you can use a stock calculator, which considers factors like²:
- *Number of shares*
- *Purchase price*
- *Selling price*
- *Commission fees*
- *Capital gain tax rate*
In addition to it, profit and loss statements (P&L) are essential for businesses and investors to track financial performance. A P&L statement includes³:
- *Revenue*
- *Cost of goods sold*
- *Operating expenses* and
- *Net income*