Profit and Loss: Formulas, concepts, tricks to solve profit and loss questions.

Profit and Loss

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Profit and Loss

Profit and loss are terms that are used to find out whether a transaction is profitable or not. We also use the concept of profit and loss in our daily life. Mostly we use this concept to calculate loss or profit on a product. The price at which we buy a product is called cost price and the price at which a product is sold is called selling price. There is also a marked price which means the price which is printed on a product. So in this article, we are going to discuss profit and loss formulas, concepts/concepts, tricks, questions and examples.

Profit & Loss: Bank Exams

Profit and Loss is one of the examiner’s favorite topics which is usually asked in banking exams. Profit and Loss questions are asked in Prelims as well as Mains exam with difference in difficulty level. Instead of attempting questions initially, clear your concepts/concepts once and then practice Profit and Loss questions. Most of the candidates make the mistake of jumping straight to short tricks instead of learning the main concepts so we will provide all the profit and loss formulas and also try to clear your concepts. Keep reading this article to know, see and understand the questions and examples of profit and loss.

Profit and Loss: Basic Terms

Here we have given below some basic formulas of profit and loss which will help you to solve the questions quickly.

Cost Price

The price at which an item is purchased is called its purchase price (CP).

Selling Price

The price at which a commodity is sold is called its selling price (SP).

Profit

When the selling price is more than the purchasing price, it is called profit.

Loss

When the selling price is less than the purchasing price, it is called loss.

Marked Price or List Price and Discount

Marked price is the price that is marked on the product or also called quoted price. This is the price at which the product is quoted or intended to be sold. However, the seller may decide to give a discount to the buyer and the actual selling price may differ from the face value. If there is no discount in the product then marked price is same as selling price.

The amount of discount given will always be calculated on the marked price. This can be expressed as a discount percentage

Discount Percent = ( Selling Price (SP) / Face value (MP) × 100

Profit Loss: Formulas

• Profit = Selling Price – Cost Price
• loss = Cost Price – Selling Price
• Cost Price = Selling Price (No Profit No Loss)
• Profit percentage = (Profit × 100)/(CP)
• Loss percentage = (Damage × 100)/(CP)

Profit and Loss: Tricks

See, tricks are nothing but a way to reduce the steps to calculate the answer, only if you know the basics you can understand the logic behind the tricks. So we have provided some profit and loss tricks below which you can use while solving similar questions.

1. Profit, P = SP – CP; SP>CP
2. Loss, L = CP – SP; CP>SP
3. P% = (P/CP) x 100
4. L% = (L/CP) x 100
5. SP = {(100 + P%)/100} x CP
6. SP = {(100 – L%)/100} x CP
7. CP = {100/(100 + P%)} x SP
8. CP = {100/(100 – L%)} x SP
9. Discount = MP – SP
10. SP=MP-Discount
11. When two different articles are sold at the same selling price getting a gain of x% on the first and loss of x% on the second, then the overall% loss in the transaction is given by (x/10)² %. (Note: In such questions there is always a loss.)
12. A merchant uses faulty measures and sells his goods at gain/loss of x%. The overall % gain/loss(g) is given by (100+g)/(100+x)=(True measure)/(Faulty measure). (Note: If the merchant sells his goods at cost price, then x = 0.)
13. A merchant uses y% less weight/length and sells his goods at gain/loss of x%. The overall % gain/loss is given by (((y+x)/(100-y))×100)%

Profit & Loss: Dishonest Dealer Concept

Dishonest Dealers and faulty weights, Profit and Loss is an important topic which is generally asked in all competitive exams. In this subject, we face these types of problems in which the shopkeeper sells the goods at cost price but still, he makes profit on those goods. This can only be possible if he gives the customer a quantity less than that stated on the product. A dishonest businessman shows that he is selling the product at cost price in the welfare of the customer but in this he loses his weight.

For example, if the shopkeeper sells a 1 liter packet of milk at its cost price but he gives only 800 ml of milk in that packet. In this case he is giving 800 ml of milk to a customer and charging the customer the amount of 1000 ml. Hence, we can say that 800 ml is the cost price and 1000 ml is the selling price. Hence, by selling 800 ml milk, he is getting a profit of 200 ml milk.

Percentage Profit = ((Selling Price – Cost Price)/(Cost Price))×100

Percentage Profit = ((1000-800)/800)×100 = 25%

Profit and Loss: Questions

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