Profit and Loss - Important Points

Cost price

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

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.

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

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

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]