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Profit and Loss

The document discusses key concepts related to profit and loss calculations. It defines cost price as the price an item is purchased for, and selling price as the price an item is sold for. It states that profit is made when selling price is greater than cost price, while loss occurs when selling price is less than cost price. It provides formulas for calculating profit, loss, profit percentage and loss percentage. It also includes examples and important points about how to correctly apply these concepts and calculations.

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mengelhu
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54 views5 pages

Profit and Loss

The document discusses key concepts related to profit and loss calculations. It defines cost price as the price an item is purchased for, and selling price as the price an item is sold for. It states that profit is made when selling price is greater than cost price, while loss occurs when selling price is less than cost price. It provides formulas for calculating profit, loss, profit percentage and loss percentage. It also includes examples and important points about how to correctly apply these concepts and calculations.

Uploaded by

mengelhu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Profit and Loss

IMPORTANT FACTS
Cost Price:
The price, at which an article is purchased, is called its cost price, abbreviated as C.P.
Selling Price:
The price, at which an article is sold, is called its selling prices, abbreviated as S.P.
Profit or Gain:
If S.P. is greater than C.P., the seller is said to have a profit or gain.
Loss:
If S.P. is less than C.P., the seller is said to have incurred a loss.

Cost Price (C.P),Selling Price ( S.P),Market Price (M.P) or Retail Price (R.P) or
List Price, Discount Price .
Formulas such as ,
1.

Profit = S.P C.P :: S.P >C.P

2.

Loss = C.P S.P :: C.P > S.P

3.

Profit % = (Profit / C.P )*100 or

4.

Profit % = {(S.P C.P)/C.P }*100

5.

Loss % = (Loss / C.P )*100 or

6.

Loss % = {(C.P S.P)/C.P }*100

7.

S.P = {(100+Gain % )/100}*C.P or

8.

C.P = {100 / (100+gain %)}*S.P

9.

S.P = {(100-Loss % )/100}*C.P or

10.

C.P = {100 / (100-Loss %)}*S.P

11.

When a Person sells two similar items, one at a gain of x% and the other at a loss
of x%, then the seller always incurs a loss of is :
Loss % = {(Common Loss and Gain %)/ 10 }2 = (x/10)2

12.

When a Person buys two similar items, sells one at a gain of x% and the other at
a loss of x%, then the seller incurs no gain no loss

13.

If a trader profess to sell his goods at cost Price, But uses false weights, then
Gain % = {(error)/ ((True Value)-(Error))}*100 %

Important Points to remember that :

Profit % and Loss % is fully based on Cost Price alone .

Profit =10% i.e. 10% of Cost Price is Profit .This is the meaning of 10% Profit.

Discount is fully based on the Market Price/Retail Price/List Price.

Discount = 10% i.e. 10% on Market Price is Discount .This is the meaning of 10%
Discount.

Doubling the price and then reducing it by 50% does not yield 50% profit the
net effect is no-profit-no-loss.

Successive discounts of 10%, 20% and 30% does not yield an overall 60%
discount the actual total is only 49.6%.

Successive discounts of 25%, 10% and 5% is not the same as successive


discounts of 20%, 15% and 5% although both add up to 40%. The actual total
discounts are 35.875% and 35.4% respectively.

A is 200% of B => A = 2B. But A is 200% more of B = >A = 3B. Similarly, P is


twice as old as Q => Ps age = 2 Qs age, but A is twice older than B = >As age =
3 Bs age.

1. If, by selling an article for Rs.100, a man gains Rs15, then his gain percent is:
2. A shopkeeper sold an article for Rs 2564.36. Approximately what was his profit
percent if the cost price of the article was Rs 2400?
3. If, by selling an article for Rs 100, a man gains Rs 15, then his gain percent is :

4. If the selling price of an article is 4/3 times its cost price, the profit percent is:
5. A shopkeeper bought an article for Rs 319.60. Approximately, at what price should he
sell the article to make 25% profit?

Example:
1.A man buys an article for Rs.27.50 and sells it for Rs.28.60.Find his gain
percent ?
Buys denotes the cost price , c.p = 27.50
Sells denotes the selling price, s.p = 28.60
For finding the profit % by two methods.
1.

find the profit and apply on (3) profit % formula

2.

Directly apply in 7 th formula.

Decide which is easy for you .


First method
Profit = 28.60 27.50 = 1.10
Profit % = (1.10 / 27.50)*100 = 4%
Second Method
BH.

= ((100 + gain% )/100 }27.50

(28.60*100 )/27.50 = 100 + gain %


Gain % = 104-100 = 4%
2.John bought a satellite radio for rs 4,000 and sold it at a loss of 5% due to
unavoidable circumstances.Find his Selling Price ?
Cost Price = 4000
Loss = 5 %

From the formula 7 ,we can get it directly ,


Selling Price = rs3800.
Check with your answer
3.If the cost Price of two articles is 1000 each, one of them is sold at 10%
profit and the other at 10% loss. Find the percentage of profit or loss on the
whole transaction ?
From formula 12 ,we can say directly No Loss No Gain .Lets Check out,
Total Cost Price = Rs.2000.
Need to find the total Selling Price ,
By the Formula 7,
Selling Price of one article (10% profit) = 1100
By the Formula 8,
Selling Price of another article (10% loss) = 900
So the total selling price = 1100+900 = Rs.2000.
Selling Price = Cost Price .So No Loss No Gain in whole transaction.
4.If the Selling Price of two articles is 1000 each, sold one at 10% profit and
the other at 10% loss. Find the percentage of profit or loss on the whole
transaction ?
From formula 11, we can say that loss % = (10/10)2= 1%
Lets check out in another way ,
Total Selling Price = Rs.2000
By the Formula 7,
Cost Price of one article (sold at 10% profit) = 909.09
By the Formula 8,

Cost Price of another article (sold at 10% loss) = 1111.11


Total Cost Price = 909.09+1111.11 = Rs.2020.20
here C.P > S.P . So loss incurs in whole transaction.
Loss % = {(2020.20 2000 )/ 2020.20 }*100 = 1.00%
We have verified the answer in both the way. So we can use formula directly
5.The selling price of 15 chairs is equals to the cost price of 20 chairs. Find the
Profit or Loss % ?
Given , S.P of 15 chairs = C.P of 20 chairs.
From the above eqn we can conclude that we can get profit. Because Selling 15
chair itself we will get the total cost of the 20 chairs. So we get the profit of
selling 5 chairs.
First method,
Using Profit% formula we can find the answer,
Profit% = (Profit/ Cost Price )*100
Profit % = {(S.P of 5 chairs)/(S.P of 15 chairs or C.P of 20 chairs) }*100
Profit % = (5/15)* 100 = 33.33%
Second method,
Let we take cost price be Rs 1,selling price be Rs x.
from the eqn, we can write 15x = 20 ; x = Rs. 1.3333
S.P > C.P , So we will get profit only. Profit = 1.3333 1.00 = Rs. 0.3333
Profit % = (0.3333/1 )*100 =33.33%
Third method,
Let we take cost price be rs x and selling price be rs y

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