Profit & Loss
20 Questions
Practice Problems
Profit & Loss Interview Questions
20 Questions
Profit & Loss Basics
What is Cost Price (CP)?
Cost Price is the price at which an article is purchased or produced. It is the base value used to calculate profit or loss in any transaction. Formula: CP = SP - Profit (if profit is made) CP = SP + Loss (if loss is made) Example: If an item is bought for ₹500, then CP = ₹500
What is Selling Price (SP)?
Selling Price is the price at which an article is sold. Comparing SP with CP determines whether a profit or loss has occurred in the transaction. Formula: SP = CP + Profit (if profit is made) SP = CP - Loss (if loss is made) Example: If CP = ₹500 and Profit = ₹100, then SP = ₹600
How do you calculate Profit?
Profit is the gain made when the Selling Price is greater than the Cost Price. It represents the positive difference between SP and CP. Formula: Profit = SP - CP Example: CP = ₹400, SP = ₹500 Profit = 500 - 400 = ₹100
How do you calculate Loss?
Loss occurs when the Selling Price is less than the Cost Price. It represents the negative difference between SP and CP. Formula: Loss = CP - SP Example: CP = ₹600, SP = ₹500 Loss = 600 - 500 = ₹100
How do you calculate Profit Percentage?
Profit Percentage expresses profit as a percentage of the Cost Price. It helps compare profitability across different transactions. Formula: Profit% = (Profit / CP) × 100 Example: CP = ₹400, SP = ₹500 Profit = ₹100 Profit% = (100 / 400) × 100 = 25%
How do you calculate Loss Percentage?
Loss Percentage expresses loss as a percentage of the Cost Price. It indicates how much relative loss occurred on the original purchase price. Formula: Loss% = (Loss / CP) × 100 Example: CP = ₹500, SP = ₹400 Loss = ₹100 Loss% = (100 / 500) × 100 = 20%
How do you find Selling Price when Profit% is given?
When the Cost Price and Profit Percentage are known, the Selling Price can be calculated directly using the formula below. Formula: SP = CP × (100 + Profit%) / 100 Example: CP = ₹800, Profit% = 25% SP = 800 × 125 / 100 = ₹1000
How do you find Selling Price when Loss% is given?
When the Cost Price and Loss Percentage are known, the Selling Price can be calculated using the formula below. Formula: SP = CP × (100 - Loss%) / 100 Example: CP = ₹800, Loss% = 25% SP = 800 × 75 / 100 = ₹600
How do you find Cost Price when Profit% and SP are given?
When the Selling Price and Profit Percentage are known, the Cost Price can be back-calculated using the formula below. Formula: CP = SP × 100 / (100 + Profit%) Example: SP = ₹1200, Profit% = 20% CP = 1200 × 100 / 120 = ₹1000
How do you find Cost Price when Loss% and SP are given?
When the Selling Price and Loss Percentage are known, the Cost Price can be back-calculated using the formula below. Formula: CP = SP × 100 / (100 - Loss%) Example: SP = ₹800, Loss% = 20% CP = 800 × 100 / 80 = ₹1000
Discount & Marked Price
What is Marked Price (MP)?
Marked Price is the price printed or tagged on an article before any discount is applied. It is also called the List Price or Tag Price. Formula: MP = SP × 100 / (100 - Discount%) Example: If SP = ₹850 after 15% discount MP = 850 × 100 / 85 = ₹1000
What is Discount?
Discount is the reduction given on the Marked Price of an article. It is always calculated on the Marked Price, not on the Cost Price. Formula: Discount = MP - SP Discount% = (Discount / MP) × 100 Example: MP = ₹1000, SP = ₹850 Discount = 1000 - 850 = ₹150 Discount% = 15%
How do you find SP after a discount on Marked Price?
After applying a discount percentage to the Marked Price, the Selling Price is what the customer actually pays. Formula: SP = MP × (100 - Discount%) / 100 Example: MP = ₹2000, Discount% = 10% SP = 2000 × 90 / 100 = ₹1800
A shopkeeper marks his goods 40% above CP and gives 20% discount. Find Profit%.
This is a classic combined Marked Price and Discount problem. The net effect of marking up and discounting gives the actual profit. Solution: Let CP = ₹100 MP = 100 + 40% = ₹140 SP = 140 × (100 - 20) / 100 = 140 × 80 / 100 = ₹112 Profit = 112 - 100 = ₹12 Profit% = 12%
What happens when two successive discounts are applied?
When two discounts are applied one after another, the net discount is not their sum. The second discount is applied on the already-discounted price. Formula: Net Discount% = d1 + d2 - (d1 × d2) / 100 Example: Discount 1 = 20%, Discount 2 = 10% Net Discount = 20 + 10 - (20×10)/100 = 30 - 2 = 28%
Advanced Profit & Loss
A man buys 2 items at ₹1200 each. He sells one at 20% profit and one at 20% loss. What is the overall result?
This is a classic trap question. When two items are sold at the same profit% and loss%, there is always a net loss. Solution: SP of item 1 = 1200 × 120/100 = ₹1440 SP of item 2 = 1200 × 80/100 = ₹960 Total CP = ₹2400, Total SP = ₹2400 Overall result = No profit, No loss Note: This is only break-even because the CPs are equal. If CP were different, the formula Loss% = (Common%²)/100 applies.
What is the formula for net profit/loss when same SP is given for two items with equal profit% and loss%?
When two articles are sold at the same Selling Price, one at x% profit and one at x% loss, there is always a net loss regardless of the percentage. Formula: Net Loss% = x² / 100 Example: x = 20% Net Loss% = 20² / 100 = 400 / 100 = 4%
A trader cheats by using a false weight of 900g instead of 1kg. What is his profit%?
Cheating using false weights is a common exam problem. The trader sells 900g but charges for 1000g, gaining extra. Formula: Profit% = (True weight - False weight) / False weight × 100 Solution: Profit% = (1000 - 900) / 900 × 100 = 100 / 900 × 100 = 11.11%
By selling an article for ₹960, a man loses 20%. At what price should he sell to gain 20%?
First find the Cost Price from the loss condition, then calculate the new Selling Price for the desired profit. Solution: SP = ₹960, Loss% = 20% CP = 960 × 100 / 80 = ₹1200 For 20% profit: SP = 1200 × 120 / 100 = ₹1440
A sells an article to B at 10% profit. B sells it to C at 20% profit. If C pays ₹1320, what did A pay?
Work backwards from C's price through each transaction to find A's original Cost Price. Solution: Let A's CP = x A sells to B: B's CP = x × 110/100 = 1.1x B sells to C: C's CP = 1.1x × 120/100 = 1.32x 1.32x = 1320 x = 1320 / 1.32 = ₹1000 A's Cost Price = ₹1000