profit & loss Topic-wise Practice Test, Examples With Solutions & More Shortcuts

Profit & Loss - Basic Formulas, Shortcuts, Rules, Tricks & Tips - Quantitative Aptitude

Useful For All Competitive Exams Like UPSC, SSC, BANK & RAILWAY

Posted By Careericons Team

Introduction to Profit & Loss:

Profit is an amount of money that is gained in business or trade. When the cost of making something is less than the amount it is sold for, there is considered to be a profit or gain. And, if a business makes a Loss, it earns less money than it spends and is therefore in debt. In other words, when a business or shop sells something at a loss, it sells it for a price which is less than what it cost to produce or less than what it cost to buy it.

The terms profit and loss are largely used in trade problems. Some other terms used in the context are cost price, selling price, marked price, and discount which are normally used in problems relating to profit and loss.

Important Definitions and Theory Regarding Profit & Loss Quantitative Aptitude Topic :

Profit or Gain: If the selling price of an article is more than its cost price, then the dealer (or shopkeeper) makes a profit (or gain) i.e.,

Loss: If the selling price of an article is less than its cost price, the dealer suffers a loss i.e.,

Cost price (C.P.) is the price at which an article is purchased. i.e, The money paid by the shopkeeper to the manufacturer or whole -seller to buy goods is called the cost price (cp) of the goods purchased by the shopkeeper.

Selling price (S.P.) is the price at which an article is sold. i.e, The price at which the shopkeeper sells the goods is called selling price (s.p) of the goods sold by the shopkeeper to the customer.

1. When selling price is greater than cost price there is always some profit or gain. (S.P. > C.P. Profit).
2. When the selling price is less than the cost price, there is always a loss (S.P. < C.P. Loss).

Marked price is the list price of the goods. To avoid loss due to bargaining by the customer and to get profit over the cost price, the trader increases the cost price. This increase is known as markup and the increased price (i.e., cp+markup) is called the marked price or printed price or list price of the goods.

Generally goods are sold at marked price, if there is no further discount, then in this case selling price equals marked price.

Discount is a certain amount of rebate given to attract customers. Discount means reduction of marked price to sell at a lower rate or literally discount means concession. Basically, it is calculated on the basis of marked price.

Listed Price is when a manufacturer decides the retail prices of its different products, then these retail prices are either printed on the products or a list of retail prices of different products is sent to all its retail shopkeepers. Since the list price is decided by the manufacturer and not by its retail shopkeeper, therefore it is the same at all retail shops.

Successive Discounts is if two or more discounts are allowed one after the other then such discounts are known as successive discounts or discounts in series. Suppose a discount of 15% is given, then on the reduced price a discount of 10% is also given. In such a case, we say that the successive discounts of 15% and 10% are given.

Other terms related to the purchase of an article include:

• MP = Marked Price
• AP = Advertised Price
• PP = Printed Price
• LP = Listed Price
• NP = Net Price (i.e, Net price = Marked price – discount)

All these prices are the prices at which the article is listed or marked to be sold. In other words, they are the price that are labelled on the article and the price at which the article shall be sold.

"16" - Important Aptitude Rules, Formulas & Quick Tricks to Solve Profit & Loss Based Problems

In this list of rules, you will get an idea that How to solve all different types & kinds of Profit & Loss based aptitude problems asked in various competitive exams like UPSC, SSC, Bank, and Railway examinations at all levels.

By using this method, you can able to solve all problems from basic level to advanced level of questions asked based on Profit & Loss in a faster approch.

Let's discuss the rules one by one with all Profit & Loss formulas with examples,

Rule 1:

If S.P > C.P. then there will be profit

Note: Both profit and loss are always calculated on cost price only.

Rule 2:

If C.P > S.P., then there will be

Rule 3:

If an object is sold on r% Profit. then,

Similarly, If an object is sold on r% loss, then

Rule 4:

Successive Profits:

If A sells an article to B at a% profit and B sells it to C at b% profit
OR
If a% and b% are two successive profits
then

If A sells an article to B at a% profit and B sells it to C at b% profit and if C paid Rs.x, then amount paid by

Rule 5:

If a% and b% are two successive losses then (negative sign shows loss and positive sign shows profit).

Rule 6:

If a% profit and b% loss occur, simultaneously then overall loss or profit% is

(-ve sign for loss, +ve sign for profit)

Rule 7:

If a% loss and b% profit occur then, total loss/profit is

(negative sign for loss and positive sign for profit)

Rule 8:

If cost price of 'x' articles is equal to selling price of 'y' articles, then Selling Price = x, Cost Price = y
Hence,

Rule 9:

On selling 'x' articles the profit or loss is equal to Selling of 'y' articles, then

Rule 10:

If a man sells two similar objects, one at a loss of x% and another at a gain of x%, then he always incurrs loss in this transaction and loss% is $x^2/100%$

Rule 11:

A man sells his items at a profit/loss of x%. If he had sold it for Rs. R more, he would have gained/lost y%.

'+' = When one is profit and other is loss.
'–' = When both are either profit or loss.

Rule 12:

If a man purchases 'a' items for Rs.x and sells 'b' items for Rs.y. then his profit or loss per cent is given by $({ay - bx}/{bx})$ × 100%

Rule 13:

If the total cost of 'a' articles having equal cost is Rs.x and the total selling price of 'b' articles is Rs.y, then in the transaction gain or loss per cent is given by $({ay - bx}/{bx})$ × 100%

Where positive value signifies 'profit' and negative value signifies 'loss'

Rule 14:

A dishonest shopkeeper sells his goods at C.P. but uses false weight, then his

Rule 15:

If A sells an article to B at a profit (loss) of $r_1$% and B sells the same article to C at a profit (loss) of $r_2$% then the cost price of article for C will be given by

(Positive and negative sign conventions are used for profit and loss.)

Rule 16:

If a vendor used to sell his articles at x% loss on cost price but uses y grams instead of z grams, then his

(Profit or loss as per positive or negative sign).

Refer: Get all Topic-wsie Quantitative aptitude problems for upcoming competitive exams