Profit and loss are two terms that are central to trading: the financial returns (or outgoings without returns) from any business enterprise or trade.
Profit and loss is calculated by taking the total revenue derived from an activity and taking away the total expenses. It looks like this:
Profit and loss = total revenue – total expenses
If the resulting figure is negative, you have made a loss. If it is a positive, you have made a profit.
Profit and loss is key to traders in several ways, including: