Profit and Loss
Nov 22, 2022, 16:45 IST
The formula for profit and loss is used in maths to calculate the commodity price in the market and to understand how profitable a business is. Each product has its cost price and the selling price. It is totally based on these particular prices; we can also calculate the achieved profit or loss for a specific product. Important terms here are cost price, fixed, variable, semi-variable costs, selling price, marked price, list price, margin, etc. We will also learn the profit and loss percentage formula here.
For example, for a trader, if the value of the commodity's selling price is more than the cost price, it is always a profit, also, if the cost price is more than the selling price, it always becomes a loss. In this short article, we will discuss the concepts of profit and loss and tricks to solve problems based on them.
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Profit (P)
The amount gained by selling the product for more than its cost price is known as profit.
Loss (L)
The amount the seller incurs after selling the product less than its cost is known as loss.
Cost Price (CP)
The amount paid for the product or commodity to purchase is known as the cost price. Also denoted as CP. This cost price is further classified into two different categories:
- Fixed Cost: The fixed cost is constant. It doesn’t vary under any circumstances
- Variable Cost: It could vary depending on the number of units and other factors
Selling Price (SP)
The amount for which the product is sale is known as the Selling Price. It is generally denoted as SP and sometimes known as the sale price.
Marked Price Formula (MP)
The shopkeepers label this to offer a discount to the customers in such a way that,
- Discount = Marked Price – Selling Price
- Discount Percentage = (Discount / Marked price) x 100
Formulas of Profit and Loss
- Profit or Gain = Selling price – Cost Price
- Loss = Cost Price – Selling Price
Formula of the profit and loss percentage is given as:
- Profit percentage (P%) = (Profit / Cost Price) x 100
- Loss percentage (L%) = (Loss / Cost price) x 100
Few Tricks for Profit and Loss
- Profit, P = SP – CP; SP>CP
- Loss, L = CP – SP; CP>SP
- P% = (P / CP) x 100
- L% = (L / CP) x 100
- SP = {(100 + P%)/100} x CP
- SP = {(100 – L%)/100} x CP
- CP = {100/(100 + P%)} x SP
- CP = {100/(100 – L%)} x SP
- Discount = MP – SP
- SP = MP -Discount
Solved Examples
Q1. Suppose a shopkeeper has bought 2 kg of apples for 200 rs. And sold it for Rs. 250 per kg. Find the profit gained by him?
Ans. Cost Price for apples is 200 rs.
Selling Price for apples is 250 rs.
Thus profit gained by shopkeeper is ; P = SP – CP
P = 250 – 200 = Rs. 50
Q2. A man buys a fan for Rs. 2000 and it sells at a loss of 20%. What is the selling price of the fan?
Ans. Cost Price of the fan is Rs.1000
Loss percentage is 15%
As we know, Loss percentage = (Loss/Cost Price) x 100
15 = (Loss/1000) x 100
Therefore, Loss = 150 Rs.
As we know,
Loss = Cost Price – Selling Price
So, Selling Price = Cost Price – Loss
= 1000 – 150
Selling Price = R.850
Frequently Asked Questions (FAQs)
Q1. What is the profit and loss formula?
Ans. Profit = Selling price – Cost price
Loss = Cost price – Selling price
Q2. What is CP and SP in maths?
Ans. In mathematics, CP represents the cost price, and SP represents the selling price.
Q3. How is CP calculated?
Ans. CP is calculated with the help of the formulas mentioned below:
CP (selling price) when the profit% and selling price is mentioned:
CP = {100 / (100 + P%)} x SP
CP (selling price) when the loss% and selling price is mentioned:
CP = {100 / (100 – L%)} x SP
