Learn to calculate profit and loss in trading

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Posted: Posted Date – 11:45 PM, Sat – Sep 24, 22

Learn to calculate profit and loss in trading

Hyderabad: This new series of articles will focus on the subject of profit and loss. Here is the introduction to the subject along with practice questions and solutions that will help you in your preparation for the state government recruitment tests.

profit and loss

In our day-to-day life, we sell and buy things according to our needs.

A client can get things in the following way.

Manufacturer (or producer)

Wholesaler (reseller)

(Trader) Retailer (Seller)

Customer

Formula :

1. Profit = SP – CP
2. Profit Percentage = Profit / Cost Price × 100%
3. Loss = CP – SP
4. Loss percentage = Loss / Cost price × 100%
5. SP = {(100 gain % / 100) × CP} = {(100 – loss % / 100) × CP}
6. If a trader sells his goods with a% loss on cost but uses bg instead of cg, then his profit or loss percentage is {(100 – a)c/b – 100}% as a positive sign or negative.
7. If a merchant sells his goods at a profit or loss on cost price and uses b% less weight, then his profit or loss percentage will be {(b – a)/100-b × 100% } according to positive and negative values.
8. If a dishonest trader claims to sell his items at CP but uses a fake weight, then
Gain% = (Error / True Value – Error) × 100%
Gain% = (True weight – False weight/ False weight) × 100%
9. When two items are sold at the same price but one of them at a profit and the other at a loss and the profit percentage is the same as the loss percentage. In this case, there is always loss.
loss% = {common gain or loss/10)2

Examples

1. If the cost price is 95% of the selling price, what is the profit percentage?

a) 5.26% b) 6.75% c) 7.2% d) 8.5%

Answer : a

The solution: If the cost price is x, then
SP=100/95x=Rs 20/19×100
 Gain = 20x/19 = Rsx/19 – 20
 Gain percentage = (x/19) / x × 100
= 5.26%

2. Selling an item for 651, there is a loss of 7%. The cost price of this item is?

a) 675 b) 700 c) 725 d) 750

Answer : b

The solution: Let the CP of the item be ‘x’
Q (100 – 7)% x = 651
x = 651/93 × 100 = Rs 700

3. In terms of profit percentage, what is the best trade?

CP (in ) Profit (in )

(I) 36 17

(II) 50 24

(II) 40 19

(IV) 60 29

a) I b) II c) III d) IV

Answer : D

The solution: Case I: Profit percentage
(17 × 100) / 36 = 47%
Case II: Profit percentage
(24 × 100) / 50 = 48%
Case III: Profit percentage
(19 × 100) / 40 = 47.5%
Case IV: Profit Percentage
(29 × 100) / 60 = 48.3%
Obviously, (d) is the best transaction.

To be continued…

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