PROFIT AND LOSS

#POST1
Basics Concepts
Profit/Loss percentage = (profit or loss /cost price)×100
Marked price = CP + Markup
Marked price = CP + (% markup on CP)
Mark up % = (Markup/CP) ×100

SP = Mark up price – Discount

SP = Mark up price – (discount % on mark up price)
Discount % on mark up price = (Discount/Markup) ×100

Markup
CP MP
Discount
Profit SP

Important points
If mark up is a% and discount is a%, there will be a loss of (a^2)/100 %
Profit and loss percentage can be calculated for any number of units and will always be same.
So profit percentage of 1 unit is same as 10 units or 1 lac units
In many questions, actual numbers play no role in PPL. Can be answered simply by
percentages and ratio
#POST3
No pen and paper
Mark-up percentage is 20% and discount percentage is 10%. What is the profit loss
percentage?
Let cost be 100. Therefore mark up = 120. Therefore sales = 108
Profit percentage = 8%

#POST4
No pen and paper
Mark up percentage is 40% and profit percentage is 5%. What is the discount percentage?
Let cost be 100. Therefore mark up = 140. And sales = 105. Therefore discount percentage =
(140-105)/140 x 100 = 25%
Mark up percentage = 40%

#POST5
No pen and paper
Profit percentage is 33% and discount percentage is 5%. What is the mark up percentage?
Let cost be 100. Therefore sales = 133. Therefore mark up = 133 x (100/95) = 140
Mark up percentage = 40%

#POST6
Another concept
Cost of m articles = Sales of n articles
Ratio of cost price and selling price = n:m
So cost of 10 articles = sales of 8 articles
Cost/ Sales = 8/10
Therefore profit percentage = 2/8 = 25%
Cost of 15 articles = Profit of 50 articles
Profit/Cost = 15/50= 30%

Question:
Sales of 20 articles = Mark up of 16 articles
Profit of 3 articles = Discount of 5 articles
Find profit percentage and mark up percentage

Answer: Sales/Mark up = 16/20

Discount percentage = 4/20 = 20%
Profit/Discount = 5/3
So when sales = 16 and discount = 4, profit = 6.66
So cost = 16 – 6.66 = 9.33
Profit percentage = 6.66/9.33 = 71.4%
So mark up percentage = 10.66/9.33 = 114.28
#POST7
a) 2 items of cost price sold at different profit percentage
Simply take the average of the two profit percentage
For example: Items A and B of the same cost price sold at profit of 40% and loss of 20%.
Overall average is (40-20)/2 = 10% profit

b) 2 items sold at same selling price, one at a% profit and other at a% loss

Overall LOSS PERCENTAGE = (a^2)/100 %

Ratio of cost price of 2 items = (100+x)/(100-x)
For example:
2 items were sold at Rs. 2500, one at a profit of 20% and other at a loss of 20%
Find the overall profit/loss percentage and the ratio of the 2 cost prices

OA: Overall loss percentage = (20^2)/100 = 4% loss

Ratio of cost price = 120:80=3:2

#POST8
2 items have the same selling price. One was sold at a profit/loss of x% and other at profit/loss
of y%
Ratio of the 2 cost price =
(100 ± y) : (100 ± x)
Example:
2 items were sold at Rs. 2500 each. One at a profit of 25% and other at a loss of 20%
Find the cost price of the costlier item

OA: Cost price of the cheaper item = (100/125) x 2500 = 2000

Ratio of cost price = 80/125
Cost price of the costlier item = 2000 x (125/80) = 3125

#POST9
Destruction:
25% of the goods of a person is destroyed. He sells 20% of the remaining at 20% below cost
price. He sells P% of the remaining at 50% above cost price and rest at 25% less than cost
price. He makes no profit no loss. Find P

Answer: Let the cost be 100. So sales of goods worth 25 = 0. Sales of goods worth 15 (20% of
remaining) = 12 (20% below cost price)
Now goods worth 60 remain
Finally there is no profit no loss
So sales of goods worth 60 must be 63 (to balance the -3 from earlier)
Therefore 5% profit
One part sold at 50% profit and rest at 25% loss
Therefore ratio of the profit quantity and loss quantity = (5- - 25) : (50-5) = 2:3
So goods sold at profit 2/5th of 60 = 24 or 40%

#POST10
Profit calculated on SP
Two shopkeepers sell some article for Rs 4000 each. A shopkeeper calculates his profit per
cent on his CP and another calculates his profit per cent wrongly on SP. What is the difference
in their actual profit if both claim to have a profit of 20%?
Oa:

(4000 *5/6) - (4000*4/5) = 133.33

#POST11
Cheating concept
Shopkeeper cheating while selling
Percentage of cheating in quantity is A%
Then the increase in profit will be (A/(100-A)) %
For example shopkeeper gives 20% less, then profit will increase by 20/80 = 25%
Example: Shopkeeper gives 16.66% less and marks up his goods by 20%
Then impact on profit due to cheating in quantity = 16.66/83.33= 20%
Overall profit = (1.2 x 1.2) - 1 = 1.44 – 1= 44%
OR (20 + 20 + 20x20/100) = 44%

#POST12
A shopkeeper gives 950 grams for every1 kg. If he makes a profit of 20%, at what price above
cost price does he claim to sell?

Answer: Let the cost price of every gram be Re. 1. Therefore cost price of 95 grams =950
rupees and selling price of 950 grams = 950x1.2= 1140
Therefore customer is paying 1140 for 1000 kg which should cost the shopkeeper Rs. 1000
Therefore he claims to sell 140/1000 over cost price or 14%

#POST13
A shopkeeper has a common weighing scale with one pan weighing 100 grams and other
weighing 80 grams. If he claims that his cost price is Rs. 20 per kg and selling price is Rs. 22.54
per kg, what is his profit percentage?

Answer: He gives 20 grams less in quantity. However profit percentage depends on the quantity
purchased and we have no data for the same. Therefore cannot be determined. :P

# POST14
A shopkeeper buys at Rs. 12 per kg and sells at Rs. 14.4 per kg. However due to a faulty
weighing scales he always gives 1.25 kgs instead of 1 kg. What is his profit/loss percentage?
Answer: Cost of 1 kg=12
Cost of 1.25 kg= 15
Selling price of 1.25 kg= 14.4
Therefore loss percentage= .6/15= 4%

#POST15
A person marks up his goods by (5P/2) % and gives 2 successive discounts of P%. His overall
loss is (P^2)/100 %. Find P

focus on the 2nd discount and the loss percentage..after giving a discount of P% the loss is
(P^2)/100%, therefore the mark up for the amount before the 2nd discount must be P%..think
about it..or take a few numbers and see...in the very first post we discussed this
After giving the final discount of P%, the net result is P^2/100 %..so the price after first discount
is P% above the cost price..WHich means that cost price when raised by (5P/2)% and then
discounted by P% is P% above the cost price. Now either by equation or trial and error we can
find P = 20..

#POST16
A shopkeeper buys 15 pencils for Rs 25 and offers two pencils free with every purchase of 10
pencils for Rs 20. What is his gain or loss percent?

OA: 0%

#POST17
A person buy m apples at the rate of Rs. 20 per dozen another m apples at the rate of Rs. 30
per score. He sells all of them at the rate of Rs. 3 for 2. Find his overall profit/loss percentage

OA: 5% CP and SP of 2nd half is same so no profit no loss..For the qst half SP for 12 = 18, CP
for 12 = 20..so loss percenage on hlf the goods = 10%, so overall loss = 5%

#POST18
A trader bought oranges of three different grades. The first cost him Rs.4.20 per dozen, the
second cost him Rs.27.00 for a box of 100. Find what he paid for a case of 150 oranges of the
third grade, if he made a profit of 25% by mixing them in the ratio 1 : 2 : 3 respectively, and
selling them at Rs.3.50 per dozen

OA: Number of oranges of grade1, grade 2 and grade 3 are 50, 100 and 150 respectively
Cost of Grade 1= (50×4.2)/12=17.5
Cost of grade 2= 27
Earnings= ((50+100+150)×3.5)/12=87.5
Profit percentage= 25%
Therefore total cost= (87.5×100)/125=70
Cost of grade 1 and grade 2= 17.5+27= 44.5
Cost of grade 3= 70-44.5= 25.5

#POST19
A person starts an auto bulb manufacturing units where he manufactures 10000 bulbs per day
at a cost of Rs. 12000. He gives 2000 bulbs free every day to dealers to promote his brand.
However another option is to decrease the marked price of bulbs from Rs. 2 to 1.8 per bulb and
not give free bulbs but reduce the discount to 16.66%. If he gives a discount of 25% on the
marked price, then what is the profit percentage of the more profitable option?
a) 25%
b) 26.66%
c) 53.33%
d) 22.22%

OA: Since cost is same for both cases, therefore profit percentage will be higher for the case
which has a higher sales
Sales for the existing option= (10000-2000)(2-25% of 2)= 8000x1.75= 14000
Sales for the proposed option= 10000x(1.8-16.66% of 1.8)= 10000x1.5= 15000
Therefore proposed option is the more profitable one
Profit percentage in the proposed option= (15000-12000)/12000×100=25%