Profit Loss and Discount

Terms (Profit, Loss and Discount)

In business and marketing we come across words like profit, loss and discount. Cost price, selling price and marked price of an article. The definitions of these terms are given here.
Marked price (M.P.)
Marked price is marked on the article. It is the price at which the shopkeeper decides to sell the article.


Cost price (C.P.)
Cost price is the cost of the article for the shopkeeper. It is the amount which the shopkeeper paid to buy the article from wholesaler. Wholesaler is a person who buy goods in bulk i.e. large quantities. For example shopkeeper buys toothbrush in 50 quantity but wholesaler will buy from factories in 2000 quantity and distribute to shopkeepers.


Selling price (S.P.)
Selling price is the amount which the customer has to pay to the shopkeeper.


Discount (D)
the difference of Marked price and selling price is Discount.
Discount = Marked Price - Selling Price


Profit
If the selling price is greater than cost price then the shopkeeper makes a profit and the profit is the difference of Cost price and selling price.
Profit = Cost Price - Selling Price


Loss
If the cost price is less than selling price then the shopkeeper makes a loss and the loss is the difference of Selling price and Cost price.
Loss = Selling Price - Cost Price


Profit %
It is the percentage of profit and Cost price.
Profit % = (Profit/C.P.)×100 = [(C.P. - S.P.)×100]/(C.P)


Loss %
It is the percentage of Loss on Cost price.
Profit % = (Loss/C.P.)×100 = [(S.P. - C.P.)×100]/(C.P)


Discount %
It is the percentage of Discount on Marked price.
Discount % = (Discount/M.P.)×100 = [(M.P. - S.P.)×100]/(M.P)

Formulas (Profit, Loss and Discount)

  • Profit = Selling price − Cost price

  • Loss = Cost Price − Selling Price

  • Cost Price = Selling Price − Profit
    or
    Cost Price = Selling price + Loss

  • Selling Price = Cost Price + Profit
    or
    Selling Price = Cost Price − Loss

  • Profit % = Profit/Cost Price × 100

  • Loss % = Loss/Cost Price × 100

  • Discount = Marked Price − Selling Price

  • Selling Price = Marked Price − Discount

  • Marked Price = Selling Price + Discount

  • Discount % = Discount / Marked Price × 100



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