Profit and Loss, Discount  
Profit and loss calculations are extensions of percentage
only with a few twists thrown in because of play of words. In standard MBA
exams, approaching these problems in a straight and simplified manner can save
you from puzzlement.
I will start this chapter by giving two problems on profit and loss: Problem 1: you have decided to make a donkey out of me. You buy a widget for $100 and sell it to me for $200. You buy it back from me for $300 and then sell it back to me for $400. Have you made any profit in this process? If yes, how much. Answer: If you said "no profit no loss" or "$100" you're in for a surprise. Let's see how much you earned in the process and how much spent. Your earnings = $200 + $400 = $600. Your spending = $100 + $300 = $400. Therefore, the amount earned by you = $600  $400 = $200. Here's the first rule of profit and loss.
Problem 2: Here is an old puzzle: There are two shopkeepers having shops side by side. The first shopkeeper sells bicycles. He sells a bicycle worth $30 for $45. One day a customer comes and buys a bicycle. He gives a $50 note to the shopkeeper. The shopkeeper doesn't have change so he goes to the second shopkeeper, gets the change for $50, and gives $5 and the bicycle to the customer. The customer goes away. The next day the second shopkeeper comes and tells the first shopkeeper that the $50 note is counterfeit and takes his $50 back. Now, how much does the first shopkeeper lose? Answer: The answer to this tricky problem can be found easily if you consider the first shopkeeper as a system. From the second shopkeeper he took $50 and gave back $50 so there was no profit no loss. To the customer he gave $5 + $30 bicycle. Therefore, his total loss is $35, as shown below: Now, here's the second rule of profit and loss, and it is EXACTLY similar to the first rule: Why am I stressing on this rule? Because if you need to pass through the maze of words which present a profit and loss problem, you will have to perform the simple arithmetic of calculating the total amount gained and total amount spent. Now here are some terms associated with profit and loss:
NOTE: the profit percentage and the loss percentage are always calculated on CP, unless stated otherwise. There's one more term you should get familiar with in profit and loss. Suppose a shopkeeper buys a product for Rs100 and he wants to earn a profit of 20% on this product. Therefore, he would like to sell the product at Rs120. But a customer wants a discount on the price. If the customer gives a discount on selling price of Rs120, his profit will decrease. Therefore, the shopkeeper prices the product at a price which is higher than Rs120. Now when the shopkeeper gives discount, the price again falls to Rs120 and the shopkeeper maintains his profit percentage. The hiked price, above the selling price, on which discount is given is known as the Marked Price. See the figure below: Before we continue with more problems, here is the most important rule to solve profit and loss problems: I shall have to end here and leave the rest of it for my CBT Club students. I shall cover some problems based on this in the CBT Club this week.

Re: Profit and Loss, Discount  
P & L looks dicounted now 
Re: Profit and Loss, Discount  
Hi December Year, I hope it's an "all profit, no loss" discount. Total Gadha 
Re: Profit and Loss, Discount  
great help TG!! thanx dude! 
Re: Profit and Loss, Discount  
Hi Rajat, Good that you found it useful. Total Gadha 
Re: Profit and Loss, Discount  
Hi TG, Thanks for the help i will go do the p&l again today. I sincerely believe this will increase my score in this area to a good extent. thanks again, Nitya 
Re: Profit and Loss, Discount  
hie tg..its been very helpful for me...but can u plz include sum more sums....so tht i can practice more precisely as explanation is also given to me.... 
Re: Profit and Loss, Discount  
Hi Paras, Check the quizzes on the main page for more problems. Total Gadha 
Re: Profit and Loss, Discount  
the exercise was really very good thanks 
Re: Profit and Loss, Discount  
The second one is not a case of successive percentage increase/decrease. 
Re: Profit and Loss, Discount  
sorry for that typo of 6.5. But no, you do not need to use 12.5. Figure it out. If some sells 87.5 g for 100 g, what is the gain percent? It's not 12.5. 
Re: Profit and Loss, Discount  
thanx tg sir could plz solve some more problems on faulty weights like the last one 
Re: Profit and Loss, Discount  
you are the master.... faulty weights qns were always a nightnmare for me but now they are my sitters thanx ji carry on gr8 work...... 
Re: Profit and Loss, Discount  
You are great!!! Great online tutorial. Math topics made easy. Keep up the good work buddy. 
Re: Profit and Loss, Discount  
Good One!!!!!....rather short way to get ur basics right 
Re: Profit and Loss, Discount  
Nice post.... keep up the good work.... 
Re: Profit and Loss, Discount  
formula is a+b(ab/100) 
Re: Profit and Loss, Discount  
Really fantastic discussion... Please keep posting more and more 
Re: Profit and Loss, Discount  
hi rahul is answer of problem 1 is Rs 5.1 
Re: Profit and Loss, Discount  
hi tg sir..thx once again 4 dis awesome article tell me where is da link 2 patnership and aevrage mixture and aleegations.thx 
Re: Profit and Loss, Discount  
thnxx buddy .... u have done a g8t job... wtng 4 some more.. 
Re: Profit and Loss, Discount  
Thank You,TG and Team for Refreshing P&L. 
Re: Profit and Loss, Discount  
hi..cud u plz explain the no.5 sum regarding faulty weights in buying and selling in more detail??? 
Re: Profit and Loss, Discount  
thnks pallav... 
Re: Profit and Loss, Discount  
oh need not t beee !!!!!! 
Re: Profit and Loss, Discount  
Hi, Thanks a ton... 
Re: Profit and Loss, Discount  
Concept explained are very lucid. thanks a lot TG. 
Re: Profit and Loss, Discount  
HI Sir, I Should have posted this before... I shall have to end here and leave the rest of it for my CBT Club students. I shall cover some problems based on this in the CBT Club this week. When i click on CBT Club it goes to the home page of CBT Club.. why don't you allow CBT club Students to Directly go to forum of respective quiz which has questions related to topic which was discussed.So that we can complete that topic. Thanku sir.. 
Re: Profit and Loss, Discount  
awesome article, the entire topic seems to be crystal clear now. 
Re: Profit and Loss, Discount  
hello hi and thank you for your nice article ........really thanks 
Re: Profit and Loss, Discount  
Change value = change valu 18 =9 100 =50 So ans is 50 
Re: Profit and Loss, Discount  
Yes King You are absolutely correct. It should be read as 44% more than cost price in place of selling price. Kamal Lohia 
Re: Profit and Loss, Discount  
Thnx TG, These post's are a gift to all.... 
Re: Profit and Loss, Discount  
A should be correct answer(33% loss) 
Re: Profit and Loss, Discount  
can u explain the logic for the above question? 
Re: Profit and Loss, Discount  
please do provide me with the key of these questions. 
Re: Profit and Loss, Discount  
All doubts are cleared Great examples(each one is handpicked) You are the best sir proud to be your student 
Re: Profit and Loss, Discount  
can anyone please explain solved example no.4 in which we need to find price of oranges 