Profit and Loss Formulas, Shortcuts, Examples, Questions

Profit and Loss - Shortcuts and Formulas

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

If the Selling Price is is more than the Cost Price we can Make Profit. or If the Cost Price is more than the Selling Price then we will end up with Loss.
Profit = Selling Price (S.P) - Cost Price (C.P)

Percentage of Profit / Loss is calculated on the cost price by the following formula

  • Profit Percent = (Profit / Cost Price) X 100
  • Loss = Cost Price (C.P) - Selling Price (S.P)
  • Loss Per Cent = (Loss / Cost Price) X 100

Note :
Profit Or Loss Per Cent is always calculated on C.P and not in S.P
2. Overhead expenses like Packaging, Transportation etc. are always added to the cost price to get the total C.P. and then profit per cent or loss per cent is calculated on this total cost price.
3. When the C.P and the S.P are given for different number of articles, first of all find C.P and S.P of equal number of articles and then only calculate profit per cent or loss per cent.

Marked Price and Discount: When we go to a shop, we find price tags attached to the goods. The original price written on the price tag is called the "Marked Price". Sometimes, a reduction or concession is given on some Goods. We call this reduction as "Discount" . In Business, Discount is to attract the customers. More the sale, More the Profit . Discount is given directly in terms of Money or in terms of other attractive articles. Direct discount is given on the labelled price. Which is much more than the actual cost price the seller has to pay. It is calculated in percentage. Seller gets profit even after giving discount to you.

The discount is always calculated on the Marked Price


Profit and Loss Formulas

  • Gain = (S.P.) - (C.P.)
  • Loss = (C.P.) - (S.P.)
  • Loss or gain is always reckoned on C.P.
  • Gain Percentage: Gain% = \left [ \frac{(Gain\times 100 )}{CP} \right ]
  • Loss Percentage: Loss% = \left [ \frac{(Loss\times 100 )}{CP} \right ]
  • Selling Price: SP = \left [ \frac{(100 + Gain \% )}{100}\times C.P \right ]
  • Selling Price: SP = \left [ \frac{(100 - Loss \% )}{100}\times C.P \right ]
  • Cost Price: CP = \left [ \frac{(100 )}{100 + Gain \%}\times S.P \right ]
  • Cost Price: CP = \left [ \frac{(100 )}{100 - Loss \%}\times S.P \right ]
  • If an article is sold at a loss of say, 35% then S.P. = 65% of C.P.


Profit and Loss Questions from Previous Year Exam

IBPS Questions related to profit and loss.


Profit and Loss Video Lecture


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