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Profit and Loss - Important Points

Profit and Loss - Questions


Cost price

Cost Price (CP) is the price at which an article is purchased.

Selling price

Selling Price (SP) is the price at which an article is sold.

If SP is more than CP, it is a profit or gain

If CP is more than SP, it is a loss.

  • Gain or Profit = SP – CP
  • Loss = CP – SP
  • Loss or gain is always reckoned on CP

Profit Percentage Formula

(Profit %) = (Profit / CP) x 100 = (SP – CP) / CP x 100 = [(SP / CP) – 1] x 100

Loss percentage Formula

(Loss %) = (Loss / CP) x 100 = (CP – SP) / CP x 100 = [1 - (SP / CP)] x 100

  • If Profit or Gain % is given then SP = CP x [(100 + Profit %) / 100]
  • CP = SP x 100 / [(100 + Profit %)]
  • If loss % is given then SP = CP x [(100 - Loss %) / 100]
  • CP = SP x 100 / [(100 - Loss %)]

If an article is sold at a profit of 25%, then SP = 125 % of  CP

If an article is sold at a loss of 25% then SP = 75% of CP

  • If a person increases the price of an item by A% and then gives a discount of B%, then
    • Net Percent Change = A – B – [(A x B) / 100]
  • If the final result is positive, that is Profit % and if final result is negative, that is loss%
  • If a trader professes to sell his goods at cost price, but uses false weights
    • Gain % = [Error / (True value – Error)] x 100
       
  • If an article is sold after allowing a discount (d%) on marked price (MP) then the selling price (SP) is given by
    • SP = (100 – d) % ×  MP
  • If an article is sold after allowing two successive discounts of d1% and d2% then selling price (SP) is given by SP = [(100 – d1) / 100] x [(100 – d2) / 100] x MP
  • Two successive discounts of d1 and d2  are equivalent to a single discount of
    • d1 + d2 – [(d1 x d2) / 100]