PROFIT AND LOSS

Profit and Loss is one of the most practical and concept-heavy topics in CSAT. Questions are framed using real-life situations such as buying and selling, discount, marked price, and comparison of gain or loss. Though formulas exist, CSAT mainly tests whether an aspirant understands the relationship between cost price, selling price, and percentage change.

BASIC TERMINOLOGY

Cost Price (CP)
• Price at which an article is purchased

Selling Price (SP)
• Price at which an article is sold

Profit (Gain)
• When SP > CP
• Profit = SP − CP

Loss
• When SP < CP
• Loss = CP − SP

PROFIT AND LOSS PERCENTAGE

Profit Percentage
• Profit percent = (Profit / CP) × 100

Loss Percentage
• Loss percent = (Loss / CP) × 100

Important Concept
• Profit or loss is always calculated on Cost Price unless specified otherwise

RELATION BETWEEN CP, SP AND PERCENTAGE

When Profit Percentage is Given
• SP = CP × (1 + Profit% / 100)

When Loss Percentage is Given
• SP = CP × (1 − Loss% / 100)

CSAT Tip
• Convert percentage into fraction for faster calculation
  – 20 percent = 1/5
  – 25 percent = 1/4

MARKED PRICE (MP) AND DISCOUNT

Marked Price
• Printed price on the article

Discount
• Reduction offered on Marked Price

Discount Amount
• Discount = MP − SP

Discount Percentage
• Discount percent = (Discount / MP) × 100

SUCCESSIVE DISCOUNT

Meaning
• More than one discount applied one after another

Formula
• Net Discount % = a + b − (ab / 100)

Example
• 10 percent and 20 percent discount
• Net discount = 10 + 20 − 2 = 28 percent

PROFIT AND DISCOUNT COMBINED QUESTIONS

Key Idea
• A seller may offer discount and still make profit

Approach
• Assume CP = 100 for simplicity
• Apply profit, then discount or vice versa
• Compare final SP

FALSE WEIGHT AND FALSE MEASURE

Concept
• Seller cheats by using wrong weights

Types
• Gives less quantity at correct price
• Gives correct quantity at higher price

CSAT Tip
• Convert cheating into percentage loss/gain logically

EQUAL PROFIT AND LOSS SITUATION

Important Result
• If an article is sold at x percent profit and y percent loss at same SP,
  then CP ratio = (100 + y) : (100 − x)

SUCCESSIVE PROFIT AND LOSS

Concept
• Profit or loss occurring more than once

Formula
• Net change = a + b + (ab / 100)
• Use negative sign for loss

PRACTICE QUESTIONS 

Question 1
A shopkeeper marks his goods 25 percent above cost price and allows a discount of 10 percent. Find his profit percentage.

Question 2
An article is sold at a loss of 20 percent. If the cost price is increased by 25 percent, what will be the new selling price in terms of original cost price?

Question 3
A trader sells two articles at the same selling price. On one he gains 20 percent and on the other he loses 20 percent. Find the overall profit or loss percentage.

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Subject: CSAT

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