# Profit & Loss- Basic concept and Shortcut tricks

**Profit, Loss and Discount: **

**Cost Price**: CP is the cost at which item is purchased.

**Selling Price**: SP is the cost at which item is sold.

**Profit/Loss**: This is the difference between selling price and cost price. If the difference is positive then it is called Profit. It the difference is negative then it is called Loss.

**Profit= Selling price (SP)-Cost Price (CP)**

**Loss= Cost price (CP)-SP (Selling price)**

**Marked Price**: This is the price of products as displayed on label.

**Discount:** This is the reduction given on marked price before selling to customer.

Mark-up: This is thr increment on the cost price before being sold to customer.

Thus **Profit %= Profit/CP X 100**

** or **

**loss %= Loss/CP X 100**

SP= CP+ P% OF CP

**SP=CP (1+P/100)**

**SP=CP X MF (Multiplying Factor)**

MF in case of profit will be more than 1 and in case of loss will be less than 1.

Thus **MF=SP/CP **So By this one can easily find profit or loss percentage. Profit or loss is always calculated on CP not SP.

- If there is gain of P% then our calculating figure would be 100 and (100+P)
- If there is loss of P% then our calculating figure would be 100 and (100-P)
- If required value is more than supplied value then MF would be= 100+P/100 OR 100/100-P(more than 1)
- If required value is less than supplied value then MF would be= 100/100+P OR 100-P/100(less than1)
- If an article is sold at a gain of 40% then SP=140% OF CP
- If an article is sold at a loss of 40 % then SP= 60% OF CP

Lets see one example

If A buys a toy for Rs 49 and sells it to B for Rs 56 then find his Percentage profit or loss?

**Profit= SP-CP/CP *100**

Percentage profit= 56-49/49 *100

= 14.28%

Alternatively One can find MF= 56/49=1.14 i.e. profit percentage of 14.28%

Concept of Faulty balance:

If a trader possess to sell his goods at cost price , but uses false weight then

**Gain= [Error/(True value-Error) * 100]%**

In this case Multiplying Factor because of cheating on volume

**MF = Amount charged for (reading)/Actual sold**

When a person sells two similar item, one at a gain of p % and the other at a loss of p%, then the seller always incurs a loss given by

**Loss=( common loss and gain/10) ^{2} **

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