Profit and Loss
John is a shopkeeper. He buys goods from the wholesaler
and sells them in his shop at a higher price to earn profit. When he succeeds
in selling at higher price, he makes profit else he suffers loss.
Let’s understand the concept in with following
If John buys sugar at rupees 50 per kg and sells at
rupees 55 per kg, he makes profit of rupees (55 – 50 = 5) per kg. But due to
some reason if he has to sell the sugar at rupees 48 per kg, he will make loss
of (50 – 48 = 2) per kg.
From the above example we understand
- The price at which John buys sugar is the Cost Price.
price is the price at which an item is purchased.
- The price at which John sells sugar is the Selling
Price. Therefore, selling price is the price at which an item is sold.
- When S.P > C.P, he makes profit or gain, i.e. Profit
or Gain = S.P – C.P
- When S.P < C.P, he suffer loss, i.e. Loss = C.P –
- Charges such as transportation cost, labor cost, salary
or wages paid, installation charge etc. are called expenses and these has to be
added to the C.P to get actual profit.
- Profit% = Profit/C.P X 100
Example: Tia’s boutique
received rupees 5,000 from one client on Wednesday, but expenses came to rupees
2700. Here income is more than the expense. So, she earned profit of
(5000-3700) = rupees 1300.
On Thursday Tia received rupees 7,000 from other client
and expenses came to rupees 7,700. Here income is less than the expense. So,
she suffered the loss of (7,700-7,000) = rupees 700.
Some more examples
Dia bought rice bag rupees 500 per bag. Due to spoilage, she had to sold them
for rupees 450 per bag. Find the gain or loss%.
Here, C.P = Rupees 500 per bag
S.P = Rupees 450 per bag
S.P < C.P, Therefore Dia suffer a loss.
Loss = C.P – S.P = 500 – 450 = Rupees 50 per bag
Loss% = Loss/C.P X 100 = 50/150 X 100 = 33.33%
Mr Ravi bought a washing machine for rupees 15,000 and sold it for rupees
17,000. Find his profit or loss percent.
Here, C.P = Rupees 15,000
S.P = Rupees 17,000
S.P > C.P, therefore Ravi made a profit.
Profit = S.P – C.P = 17,000 – 15,000 = Rupees 2000
Profit % = Profit/C.P X 100 = 2,000/15,000 X 100 = 13.33%
Reena sold a carpet for rupees 10,000 at a profit rupees 2,000. Find the price
at which she bought it.
Here, S.P = 10,000
Profit = 2,000
= S.P - Profit
= 10,000 – 2,000
= Rupees 8,000
Ravi has a Alto car worth rupees 2,50,000 and he wants to sell it at profit of
rupees 50,000. What should car selling price be?
Here, C.P = 2,50,000
Profit = 50,000
= C.P + Profit
= 2,50,000 + 50,000
= Rupees 3,00,000
Sonu bought a laptop of rupees 1,50,000 at a loss of rupees 10,000. Find
selling price of the laptop.
Here, C.P = 1,50,000
= C.P - loss
= 1,50,000 - 10,000
= Rupees 1,40,000
Nimmi sold her television for rupees 30,000 at a loss of rupees 5,000.Find the
cost price of the television.
Here, S.P = 30,000
Loss = 5,000
= S.P + loss
= 30,000 + 5,000
= Rupees 35,000