Overview: Profit & Loss

Overview: Profit & Loss | Quantitative Techniques for CLAT PDF Download

Profit and Loss

• Profit(P): The amount gained by selling a product with more than its cost price.
• Loss(L): The amount the seller incurs after selling the product less than its cost price is mentioned as a loss.
• Cost Price (CP): The price at which an article is purchased is called its cost price (C.P.)
• Selling Price (SP): The price at which the article is sold is called its selling price (S.P.)

Profit and Loss Formula

1. If the cost price (C.P.) of the article is equal to the selling price (S.P.), then there is no loss or gain.
2. If the selling price (S.P.) > cost price (C.P.), then the seller is said to have a profit or gain. Gain/Profit = S.P. – C.P.
3. If the cost price (C.P.) > selling price (S.P.), then the seller is said to have a loss. Loss = C.P. – S.P.
4. Gain % = (Gain × 100)/(C.P.)
5. Loss% = (Loss × 100)/(C.P.)
6. When the selling price and gain percent are given: C.P.= (100/(100+Gain%))×S.P.
7. When the cost and gain percent are given: S.P=((100+Gain%)/100)×C.P.
8. When the cost and loss percent are given: S.P.=((100-Loss%)/100)×C.P
9. When the selling price and loss percent are given: C.P=(100/(100-Loss%))×S.P
10. If a man buys x items for Rs. y and sells z items for Rs. w, then the gain or loss percent made by him is given by: (xw/zy-1)×100%
11. If the cost price of m articles is equal to the selling price of n articles, then % gain or loss = ((m – n)/n) × 100 (If m > n, it is % gain, and if m < n, it is % loss)
12. If an article is sold at a price S.P.₁, then % gain or % loss is x and if it is sold at a price S.P.₂, then % gain or % loss is y. If the cost price of the article is C.P., then
(S.P₁)/(100+x)=(S.P₂)/(100+y)=(C.P.)/100=(S.P_1-S.P_2)/(x-y); Where x or y is –ve, if it indicates a loss, otherwise it is +ve.
13. If ‘A’ sells an article to ‘B’ at a gain/loss of m% and ‘B’ sells it to ‘C’ at a gain/loss of n%. If ‘C’ pays Rs. z for it to ‘B’ then the cost price for ‘A’ is
where m or n is –ve, it indicates a loss, otherwise, it is +ve.
14. If ‘A’ sells an article to ‘B’ at a gain/loss of m% and ‘B’ sells it to ‘C’ at a gain/loss of n%, then the resultant profit/loss percent is given by (m+n+mn/100), where m or n is –ve, if it indicates a loss, otherwise it is +ve.
15. When two different articles are sold at the same selling price, getting a gain/loss of x% on the first and a gain/loss of y% on the second, then the overall% gain or % loss in the transaction is given by
The above expression represents overall gain or loss accordingly as its sign is +ve or –ve.
16. When two different articles are sold at the same selling price getting a gain of x% on the first and loss of x% on the second, then the overall% loss in the transaction is given by (x/10)² %. (Note: In such questions, there is always a loss.)
17. A merchant uses faulty measures and sells his goods at a gain/loss of x%. The overall % gain/loss(g) is given by (100+g)/(100+x)=(True measure)/(Faulty measure). (Note: If the merchant sells his goods at cost price, then x = 0.)
18. A merchant uses y% less weight/length and sells his goods at a gain/loss of x%. The overall % gain/loss is given by [((y+x)/(100-y))×100]%
19. A person buys two items for Rs. A and sells one at a loss of l% and the other at a gain of g%. If each item was sold at the same price, then

(a) The cost price of the item sold at a loss

(b) The cost price of the item sold at a gain

20. 20. If two successive discounts on an article are m% and n%, respectively, then a single discount equivalent to the two successive discounts will be (m+n-mn/100)%

21. If three successive discounts on an article are l%, m%, and n%, respectively, then a single discount equivalent to the three successive discounts will be

22. A shopkeeper sells an item at Rs. z after giving a discount of d% on the labeled price. Had he not given the discount, he would have earned a profit of p% on the cost price. The cost price of each item is given by

Profit and Loss Questions

Here are some profit and loss examples which will help candidates for understanding the profit and loss properly and according to the exam point of view. Candidates must try to solve thes profit and loss examples given below and verify your answers.
Q1. How much percent more than the cost price should a shopkeeper mark his goods so that after allowing a discount of 25% on the marked price, he gains 20%?
(A)  60%
(B)  55%
(C)  70%
(D)  50%
Ans:
(A)
Solution: Let the cost price of goods be Rs 100.
Gain = 20%
Therefore, Selling price = Rs 120
Discount = 25%
Marked Price = (100/100-25)x120 = Rs. 160 = 60% more

Q2. A dishonest dealer professes to sell his goods at the cost price but uses a false weight of 850 g instead of 1 kg. His gain percent is?
(A)  71 11/17%
(B)  11 11/17%
(C)  17 12/17%
(D)  17 11/17%
Ans:
(D)
Solution: If a trader professes to sell his goods at cost price, but uses false weights, then
Gain% = {Error/(True value – Error) x 100}%
In the given question, Error = 1000 – 850 = 150
Thus, Gain% = {150/(1000 – 150) x 100}% = 17 11/17%

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FAQs on Overview: Profit & Loss - Quantitative Techniques for CLAT

 1. What is a profit and loss statement?
Ans. A profit and loss statement, also known as an income statement, is a financial statement that summarizes a company's revenues, expenses, and net income or loss over a specific period of time, typically a fiscal quarter or year. It provides a snapshot of a company's financial performance and helps assess its profitability.
 2. How is net profit calculated in a profit and loss statement?
Ans. Net profit is calculated by subtracting the total expenses from the total revenues. In a profit and loss statement, the revenues are usually listed first, followed by the expenses. Subtracting the expenses from the revenues gives the net profit (or loss) for the period.
 3. What is the significance of a profit and loss statement for a business?
Ans. A profit and loss statement is significant for a business as it provides crucial information about its financial performance. It helps in evaluating the company's profitability, identifying areas of growth or improvement, making informed business decisions, and attracting potential investors or lenders.
 4. What are the components of a profit and loss statement?
Ans. The components of a profit and loss statement include the following: - Revenues or sales: The total income generated from the sale of goods or services. - Cost of goods sold: The direct costs associated with producing the goods or services sold. - Gross profit: The difference between revenues and the cost of goods sold. - Operating expenses: The expenses incurred to operate the business, such as rent, salaries, and utilities. - Net profit: The final result after subtracting operating expenses from gross profit.
 5. How can a profit and loss statement be used to analyze a company's performance?
Ans. A profit and loss statement can be used to analyze a company's performance by comparing it with previous periods or industry benchmarks. It helps in identifying trends, understanding the impact of various expenses on profitability, evaluating the effectiveness of cost-cutting measures, and making informed decisions to improve financial performance.

Quantitative Techniques for CLAT

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