Physical Memory vs. Virtual Memory

This is something that's confused me for a long time.

What is the difference between physical memory and virtual memory? Obviously, physical memory is the literal stick(s) of memory in our Macs.

Virtual memory, however, is what confuses me. For example, I have 8GB of physical memory in my Mac. Activity Monitor says I also have 8GB of virtual memory. Does this mean that I essentially have 16GB of RAM? Or is virtual memory just another term for swap?

 

Then why does Activity Monitor make the distinction between the two, like in the attached screenshot?

 

Basically V=P+S because swap is added to physical memory when it runs out.
That makes sense, thanks.