profit and loss formula

Profit and Loss formula


Profit and Loss Formula:

Cost Price (C.P):

The amount for which an article is bought is called its Cost Price (C.P).

Selling Price (S.P):

The amount for which an article is sold is called its Selling Price (S.P).

Profit or Gain:

When the S.P is more than the C.P, then there is a profit or gain.

Therefore, Profit/Gain = S.P − C.P


When the S.P is less than the C.P, then there is a loss.

Therefore, Loss = C.P − S.P

It is to be noted that the profit or loss is always calculated on the cost price.

Profit and Loss Formula:

profit and loss formula


During the month of Aadi and festival seasons, shopkeepers offer a certain percentage of rebate on the marked price of the articles in order to increase the sales and also to clear the old stock. This rebate is known as discount.

Marked price:

In big shops and departmental stores, we see that every product is tagged with a card and a price marked on it. This price marked on the card is called the marked price.

Based on this marked price, the shopkeeper offers a certain percentage of discount. The price payable by the customer after deduction of discount is called the selling price.

That is, Selling Price = Marked Price – Discount

Overhead Expenses:

Traders, retailers and shopkeepers are involved in the buying and selling of goods. Sometimes, when articles like machinery, furniture, electronic items etc., are bought, a few expenses may happen on their repairs, transportation and labour charges etc., These expenses
are included in the cost price and are called as overhead expenses.

Total Cost Price = Cost Price + Overhead Expenses

Discount Percentage Formula:

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A shopkeeper marks the price of a marker board 15% above the cost price and then allows a discount of 15% on the marked price. Does he gain or lose in the transaction?

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Profit and Loss Questions:

1) Ranjith bought a washing machine for ₹16150 and paid ₹1350 for its transportation. Then, he sold it for ₹19250. Find his gain or loss percentage.

2) The cost price of 16 boxes of strawberries is equal to the selling price of 20 boxes of strawberries. Find the gain or loss percentage.

3) By selling a bicycle for ₹4275, a shopkeeper loses 5%. For how much should he sell it to have a profit of 5%?

4) The price of a rain coat was slashed from ₹1060 to ₹901 by a shopkeeper in the rainy season to boost the sales. Find the rate of
discount given by him.

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