Profit and loss are the terms related to monetary  transactions in trade and business. Whenever a purchased  article is sold, then either profit is earned or loss is  incurred. 

Cost Price (CP) : This is the price at which an article is purchased by a seller.

Selling Price (SP) : This is the price at which the article is sold to a buyer.

Profit (Gain) : Profit is earned when the Selling Price (SP) of an article is greater than its Cost Price (CP). Mathematically, Profit = SP - CP.

Loss : Loss is incurred when the Selling Price (SP) of an article is less than its Cost Price (CP). Mathematically, Loss = CP - SP.

Discount : This is the reduction in the Selling Price (SP) of an article that a seller offers to the buyer at the time of sale. It's usually expressed as a percentage of the original selling price.

Important Formula Related to Profit and Loss

Gain = Selling Price (SP) - Cost Price (CP)

Loss = Cost Price (CP) - Selling Price (SP)