Quick Review: Profit and Loss

Profit and Loss is a very important chapter of quantitative aptitude. To solve the questions based on profit and loss in very less time, you must know the tricks. This way, you can easily save at least 30-40 seconds while doing questions of this topic.

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Cost Price (CP):The price paid to buy a particular product is called its cost price. Some overhead expenses such as transportation, taxes etc. are also included in the cost price.

Selling Price (SP):The amount of money received for the product when it is sold.

Marked Price (MP):The price that is listed or marked on the product. This is also known as printed price/quotation price/invoice price/catalogue price.

Profit/ Gain:There is a gain/profit in a transaction if the selling price is more than the cost price. The excess of the selling price to the cost price is called profit/gain.

  • Profit = Selling Price - Cost Price

Loss:When the selling price is less than the cost price there is loss in the transaction. The excess of cost price over the selling price is called loss.

  • Loss = Cost Price - Selling Price
  • Profit% = 100 * Profit/Cost Price
  • Loss% = 100 * Loss/Cost price
When profit% and loss% is same:

If two items are sold each at Rs X, one at a gain of p % and the other at a loss of p %, then the two

transactions have resulted in an overall loss of, and the absolute value of the loss Rs.

Equal % profit & loss on the same cost price of two articles:

If the cost price of two items is X, and one is sold at a profit of p % and the other at a loss of p %, then the two transactions have resulted in no gain or no loss.

Trade Discount:Discount on the Marked Price to attract customers is known as Trade Discount.

Note:The discount is always taken as a % of the Marked Price, unless otherwise specified.

Example:Let the list price of an article be Rs. 450. A discount of 5% on its list price is announced. Then, the new selling price = 450 * 95/100 = Rs 427.5.

Cash Discount:In addition to trade discount, the manufacturer may offer an additional discount called the Cash Discount if the buyer makes full payment within a certain specified time.Cash Discount is usually offered on the net price (the price after subtracting discount from the marked price).


Cash Price = Net Price - Cash Discount

Note:Cash discount is always calculated on net price, unless otherwise specified.

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False Weight:If a trader professes to sell his goods at cost price, but uses false weights, then

Successive Discounts:When a tradesman offers more than one discount to the customer, then the total discount offered is calculated by applying the method of decimals, learned in the topic of percentages.

Note:When the SP of x articles is equal to CP of y articles, what is the profit percent earned?

Profit percent =

Important Formulas

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