PROFIT AND LOSS
In this Chapter we will learn about Profit and Loss. Before starting we have to know the terms Cost Price(C.P.) and Selling Price(S.P.).
- Cost Price (C.P.) : The price at which a material is purchased is called its cost price (C.P).
- Selling Price (S.P.) : The price at which a material is sold is called its selling price (S.P).
- Profit or Gain : (S.P - C.P) means Selling Price (S.P) is greater than Cost Price (C.P).
- Loss : (C.P - S.P) means Selling Price (S.P) is less than Cost Price (C.P).
- Note :
- Profit or loss are always based on Cost Price (C.P).
- C.P is always 100% in the case of profit or loss.
5. Marked Price (M.P) : M.P of a material is known as Listed Price or Labelled Price.
- Note :
- M.P is always 100% at the time of Discount.
FORMULAS
5. When a person sells two similar articles, one at a profit of x% and the other at a loss of x%, then the seller always incurs a loss :
6. If a person sells his goods at cost price, but uses false weights, then
SOME OBSERVATIONS
- If 25% profit incured on an item :
- We can say, C.P. = 100%
- S.P. = 125%
- If 25% loss incured on an item :
- We can say, C.P. = 100%
- S.P. = 75%
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