Final answer:
The company made a profit of $1.38 million this year, which is $2.54 million more than last year. To find last year's profit, we subtract $2.54 million from $1.38 million, resulting in a loss of $1.16 million for the previous year.
Step-by-step explanation:
To calculate the profit from last year, we subtract the increase in this year's profit from this year's total profit. The company made a profit of $1.38 million this year, which is $2.54 million more than the previous year. The equation to find last year's profit is:
Last year's profit = This year's profit - Increase from last year
Last year's profit = $1.38 million - $2.54 million
Since the increase is more than this year's profit, it implies that last year there was a loss. Subtracting the two amounts, we get:
Last year's profit = -$1.16 million
Therefore, the company had a loss of $1.16 million last year. It's important to note that a negative profit is equivalent to a loss.