## Introduction

Profit and loss is an important topic of the arithmetic section of quantitative aptitude. Profit and loss is calculated on the cost price. The price at which a trader buys an article is called the Cost Price and the price at which a trader sells an article is called the selling price. Let’s see some more terms related to profit and loss:-

**Profit:** If the selling price of an item is more than its cost price, then there is a profit/gain on that item. i.e

SP - CP = Profit/Gain.

**Loss:**** **If the cost price of an item is more than its selling price, then there is a loss on that item. i.e

CP -SP = Loss

**Marked Price: **The price marked on the article in shops is called the Marked Price of that article, abbreviated as M.P.

**Discount:** Discount is the amount given on the marked price by lowering the price. S.P = M.P – Discount Or,

Discount = M.P – S.P

Remember that whenever you want to calculate profit or loss, it will always be calculated on cost price, but when it comes to calculating discount, it will always be calculated on the marked price.

Now let’s discuss some shortcuts that will take you to answers within seconds:

**Trick #1: **If m% and n% are two consecutive discounts on a scale, then the equivalent single discount will be** (m+n-mn/100)%**.

Nice shortcut. Isn’t it?

**Trick #2: **Suppose you are given the marked price and want to calculate the selling price, then one way is to do the whole calculation, however there is a shortcut: **S.P = M.P * [(100-rate of discount)/100]**

Yes, That simple it is!

**Trick #3:** Suppose you have the Selling price with you while solving a question, and you want to find a marked price; then, another quick formula that would help us:

**M.P = (100*S.P)/(100 - rate of discount)**

Now, let’s discuss some basic formulas for calculating profit and loss:-

## Basic Formulas Related to Profit and Loss

1. Profit = SP – CP 6. Loss = CP – SP

2. SP = Profit + CP 7. SP = CP – Loss

3. CP = SP – Profit 8. CP = SP + Loss

4. Percentage Profit = (Profit/CP)×100 9. Loss% = (Loss/CP) ×100

5. SP = CP + Gain

= CP + (Gain%/100) × CP

= (1 + Gain%/100 ) × CP