Loss & Profit

The cost price is the money that the producer pays.

The selling price is the money that the consumer pays.

If a producer sells the product higher than they buy, that's a profit.

For example:

Omar bought a watch for 100 SAR then he sold it for 150 SAR.

Is it a profit or a loss?

It's a profit.

And how much is the profit that Omar made?

150 - 100 = 50 SAR

If a producer sells the product lower than they buy, that's a loss.

For example:

Omar bought a watch for 100 SAR then he sold it for 80 SAR.

Is it a profit or a loss?

It's a loss.

And how much is the loss that Omar made?

100 - 80 = 20 SAR

One of the reasons of making a loss is taking wrong decisions.