Total Gadha-Profit and Loss

7/5/13
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Profit and Loss, Discount by Total Gadha - Thursday, 5 April 2007, 03:03 AM
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 EXAC TLY 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.
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Now here are some terms associated with profit and loss:
NOTE: the profit percentage and the loss percentage are always calculated on C P, 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:
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Before we continue with more problems, here is the most important rule to solve profit and loss problems:
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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
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the CBT Club this week.
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Re: Profit and Loss, Discount by De ce m be r Ye ar - W e dne sday, 11 April 2007, 05:23 PM P & L look s dicounte d now
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Re: Profit and Loss, Discount by Total Gadha - W e dne sday, 11 April 2007, 08:05 PM Hi De ce m be r Ye ar, I hope it's an "all profit, no loss" discount. Total Gadha
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Re: Profit and Loss, Discount by R AJAT SAGAR - Saturday, 14 April 2007, 02:03 PM gre at he lp TG!! thanx dude !
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Re: Profit and Loss, Discount by Total Gadha - Sunday, 15 April 2007, 06:29 AM Hi R ajat, Good that you found it use ful. Total Gadha
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Re: Profit and Loss, Discount by Nitya S - Thursday, 19 April 2007, 02:18 PM Hi TG, Thank s for the he lp i will go do the p&l again today. I since re ly be lie ve this will incre ase m y score in this are a to a good e x te nt. thank s again, Nitya
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Re: Profit and Loss, Discount by paras udani - Sunday, 22 April 2007, 12:13 AM hie tg..its be e n ve ry he lpful for m e ...but can u plz include sum m ore sum s....so tht i can practice m ore pre cise ly as e x planation is also give n to m e ....
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Re: Profit and Loss, Discount by Total Gadha - Sunday, 22 April 2007, 03:06 AM Hi Paras, C he ck the quizze s on the m ain page for m ore proble m s. Total Gadha
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Re: Profit and Loss, Discount by flyto gm at - W e dne sday, 30 May 2007, 09:28 PM
Hi TG, This is in re f to solve d e x am ple num be r 5. As soon as I re ad, " A re taile r che ats both, while buying and se lling goods", I start think ing that he is m ak ing profit on both transactions. Furthe r re ading the que stion re ve als that "he use s a balance that shows 1000g whe n the actual quantity is 1100g". So, it ge ts confirm e d that the re is som e profit involve d he re . Should this not be conside re d as a part of ove rall profit? Your approach sugge sts that you have conside re d the m one y spe nt, that is 1000 and the n the m one y e arne d that is 1210 for calculating profit. But, this is only the se cond transaction. The first transaction whe re it is visible that the re taile r is procuring the 1.1 goods at the price of 1 goods is not conside re d. Ple ase e x plain....... R e gards f2g
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Re: Profit and Loss, Discount by Total Gadha - Thursday, 31 May 2007, 07:56 AM Hi flytogm at, W hile buying, the re taile r hasn't "e arne d" any m one y. He has only re cie ve d m ore quantity for the sam e am ount of m one y. The e arnings on that e x tra quantity shows while se lling. To avoid confusion lik e the se only I ask you to ignore the inte rm e diate transaction and just calculate the am ount spe nt and am ount e arne d in the e nd. Total Gadha
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Re: Profit and Loss, Discount by rajat tiwari - W e dne sday, 13 June 2007, 12:45 AM the e x e rcise was re ally ve ry good thank s
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Re: Profit and Loss, Discount by am ir k han - Friday, 20 July 2007, 10:36 PM
see example 2 on marked price...profit and loss by giving discount of 20 percent.........? now there is a formula of successive percentage a+b+(ab/100) using that formula we get 20+20+(20*20/100)=44 ....nw my prob..... look at example 2 after rule 3 if we use the same formula we get -6.25+12.5+(-6.25*12.5/100) but this is not equal to 7.14 percent ..where am i getting wrong???
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Re: Profit and Loss, Discount by Total Gadha - Saturday, 21 July 2007, 02:08 AM The se cond one is not a case of succe ssive pe rce ntage incre ase /de cre ase .
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Re: Profit and Loss, Discount by am ir k han - Saturday, 21 July 2007, 12:31 PM
fundam e ntals quantitative aptitude ..care e r launche r...chapte r..pe rce ntage s
topic-faulty balance s.. e x am ple 44..a we ighing balance shows 900 gm for 1 k g.what is ne t profit pe rce ntage if the trade r m ark s-up his cost price by 20%?? solution:initially the re is a loss of 10% be cause of de fe ct in we ighing balance .as the re is a m ark up of 20%,ne t profit (a+b+(ab/100) =-10+20-(10*20/100)=8% the re fore the re is a ne t profit of 8%... now how this prob is diffe re nt from ur last re ply!!
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Re: Profit and Loss, Discount by Total Gadha - Saturday, 21 July 2007, 01:19 PM In your e x am ple the re is a 10% loss be cause of faulty we ight. In m y e x am ple the shok e e pe r is gaining be cause he is using 6.25% le ss we ight (se lling 87.5 g as 100 g). calculate the gain pe rce nt in this case .
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Re: Profit and Loss, Discount by am ir k han - Sunday, 22 July 2007, 11:50 AM sorry sir,but i am unable to unde rstand what you are saying.... your re ply was-"In your e x am ple the re is a 10% loss be cause of faulty we ight. In m y e x am ple the shok e e pe r is gaining be cause he is using 6.25% le ss we ight (se lling 87.5 g as 100 g). calculate the gain pe rce nt in this case ." ..... now it was not 6.25 pe rce nt le ss we ight but 12.5 pe rce nt le ss we ight so i m ust put positive sign for 12.5 and ne gative sign for 6.25 ...in this way i will again ge t the sam e answe r as i have solve d above ...sir ple ase solve this proble m using a+b+(ab/100) conce pt(as i have shown you in above e x am ple that your que stion is also succe ssive pe rce ntage type que stion as can be se e n from care e r launche r guide e x am ple )
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Re: Profit and Loss, Discount by Total Gadha - Monday, 23 July 2007, 10:12 AM sorry for that typo of 6.5. But no, you do not ne e d to use 12.5. Figure it out. If som e se lls 87.5 g for 100 g, what is the gain pe rce nt? It's not 12.5.
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Re: Profit and Loss, Discount by am ir k han - Monday, 23 July 2007, 07:44 PM obviously you are right that profit pe rce ntage is not 12.5..but.... if we visit our care e r launche r que stion and solution again,what we would find is that the y have also not calculate d profit pe rce ntage ... ok te ll m e diffe re nce be twe e n your que stion and care e r launche r que stion. care e r launche r que stion:a we ighing balance shows 900 gm for 1 k g.what is ne t profit pe rce ntage if the trade r m ark s-up his cost price by 20%?? ur que stion:a dishone st shopk e e pe r se lls goods at a price 6.25% le ss than cost price but use s 12.5% le ss we ight.what is is profit pe rce ntage ?
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Re: Profit and Loss, Discount by R IDHIMA C HO PR A - Monday, 29 O ctobe r 2007, 04:32 PM thanx tg sir could plz solve som e m ore proble m s on faulty we ights lik e the last one
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Re: Profit and Loss, Discount by sunil garg - Friday, 27 June 2008, 11:55 AM 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......
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Re: Profit and Loss, Discount by Sid J - Monday, 15 Se pte m be r 2008, 08:27 PM You are gre at!!! Gre at online tutorial. Math topics m ade e asy. Ke e p up the good work buddy.
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Re: Profit and Loss, Discount by R aunak Me hta - Tue sday, 16 Se pte m be r 2008, 09:33 AM Good O ne !!!!!....rathe r short way to ge t ur basics right
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Re: Profit and Loss, Discount by R ahul Sinha - Monday, 22 Se pte m be r 2008, 02:42 PM
Hi TG's, I am having problem in below questions.Among few of them i was able to crack in but wanted to know the basics about those that's why posting it. 1)A manufacture estimates that on inspection 12% of the articles he produces will be rejected.He accepts an order to supply 22000 articles at Rs 7.50each.he estimates the profit on his outlay including the manufacturing of rejected articles to be 20%. Find the cost of manufacturing each article. 2)In order to maintain the price line a trader allows a discount of 10% on the marked price of goods in his shop.Howerver,he still makes a gross profit of 17% on the cost price. Find the profit percent he would have made on the selling price had he sold at the marked price. 3)A man buys 50kg of oil at Rs 10 per Kg and another 40kg of oil at Rs 12 kg and mixes them.He sells the mixture at the rate of Rs 11per kg.What will be his gain percent if he is able to sell the whole lot. 4)A shopkeeper sells sugar in such a way that the selling price of 950gn is the same as the cost price of 1kg.Find his gain percent? 5)A dealer buys eggs at Rs 36 per gross.He sells the egg at a profit of 12(1/2)% on the cost price What is the selling price per egg(Approximately) 6)On selling tea at Rs 40 per kg a loss of 10% is incurred.Calculate the amount of tea (in kg) sold if the total loss incurred is Rs 80. 7)A merchant baught two transistor which together cost him Rs 480.He sold one of them at a loss of 15% and other at a gain of 19%.If the selling price of both the transistor are equal.Find the cost of lower price transistor. 8)A manufacture makes a profit of 15% by selling a color TV for Rs 5750.if the cost of manufacturing increase by 30% and the price paid by the retailer is increased by 20%, Find the profit percent made by manufacture. 9)A reduction is the price of petrol by 10% enables a motorist to buy 5gallons more for $180.Find the original price of petrol. Regard's Rahul
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Re: Profit and Loss, Discount by rahul Suk hija - Monday, 30 March 2009, 07:48 PM Nice post.... k e e p up the good work ....
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Re: Profit and Loss, Discount by punit goyal - Monday, 13 April 2009, 05:01 AM form ula is a+b-(ab/100)
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Re: Profit and Loss, Discount by bhavik a bali - Saturday, 23 May 2009, 11:19 PM he y guyss could you ple ase he lp m e in ge tting the logic of the se cond solve d e x am ple of the p&l part(orange s one )..i am not able to ge t the logic... waiting for your he lp....
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Re: Profit and Loss, Discount by Ashok Am sam ani - W e dne sday, 27 May 2009, 10:08 AM R e ally fantastic discussion... Ple ase k e e p posting m ore and m ore
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Re: Profit and Loss, Discount by vik as sharm a - W e dne sday, 3 June 2009, 12:40 PM Hi rahul
sol of ur que s no2 is le t C P=rs100, the n SP=117(as profit 17%) m ark e r price (1-discount/100)=S.P MP*0.9=117 MP=130 so ans is 30% -------------------------------------que s 4->>>>le t cost price is rs1/gram le t he bought 950g so total C P=rs950 total SP=1000 so profit=50/950)*100
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Re: Profit and Loss, Discount by am it bhoir - Saturday, 6 June 2009, 05:28 PM hi rahul is answe r of proble m 1 is R s 5.1
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Re: Profit and Loss, Discount by abhishe k tripathi - Friday, 21 August 2009, 02:08 AM hi tg sir..thx once again 4 dis awe som e article te ll m e whe re is da link 2 patne rship and ae vrage m ix ture and ale e gations.thx
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Re: Profit and Loss, Discount by Varun Agrawal - Thursday, 3 Se pte m be r 2009, 06:33 PM Hi R ahul, I got the se as the answe rs of the que stions you poste d. Se e if the y are corre ct. 1. 2. 3. 4. 5. 6. 7. R s. 5.5 11.1% 1.02% 5.2% R s. 40.5 18.18 Kgs R s. 200
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8. 6.01% 9. R s. 3.25 R e gards Varun
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Re: Profit and Loss, Discount by ram an goyal - Friday, 4 Se pte m be r 2009, 12:10 AM thnx x buddy .... u have done a g8t job... wtng 4 som e m ore ..
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Re: Profit and Loss, Discount by Ne tra Me hta - Sunday, 13 Se pte m be r 2009, 11:00 AM He y All... Plz solve this que stion.. The cost price of a pair of shoe s is incre ase d by 18%. A trade r who re vise d the se lling price of the pair of shoe s to m aintain the sam e profit pe rce ntage note d that he got R s. 9 m ore than the e arlie r profit by se lling one pair of shoe s. W hat was the e arlie r profit? 1R s.36 2R s.45 3R s.50 4R s.54 5C annot be de te rm ine d
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Re: Profit and Loss, Discount by Ak ash Gaurav - Thursday, 8 O ctobe r 2009, 09:59 PM He y Ne ha, He re is your re ply: Le ts assum e that the C P of a pair of shoe s is R s x , the profit pe rce ntage is z% and the actual profit is R s y. The n, x * z/100 = y ---- (1) Afte r incre ase in C P, C ost price = x +(18*x /100) = 1.18x Now the profit = R s (y+9) The n, 1.18x*z/100 = y+9 --- (2) If you divide e quation (1) and (2), x and z will ge t e lim inate d and you will be able to find the value of y which is the original profit. A ns: Rs 50
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Re: Profit and Loss, Discount by R O HIT K - Friday, 9 O ctobe r 2009, 10:57 PM Hi Ne tra, Le t the cost price of a pair of shoe s be R s. 100. Afte r incre ase of 18% the cost price be com e s R s. 118. Now for cost price of R s. 100 , le t profit be R s. x The re fore , for cost price of R s. 118 profit will be R s. x +9 Solving we have , (x +9)/x = 118/100=59/50 x =50 The re fore e arlie r profit is R s. 50 O ption 3 R ohit
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Re: Profit and Loss, Discount by Vinayak Mishra - W e dne sday, 21 O ctobe r 2009, 12:07 PM Thank You,TG and Te am for R e fre shing P&L.
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Re: Profit and Loss, Discount by re e m a k harbanda - W e dne sday, 18 Nove m be r 2009, 12:00 AM hi..cud u plz e x plain the no.5 sum re garding faulty we ights in buying and se lling in m ore de tail???
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Re: Profit and Loss, Discount by Pallav Jain - W e dne sday, 18 Nove m be r 2009, 12:17 AM hi Reema ! see w hat happened i s he pai d for 1000 gm. but actually got 1100 gm. So hi s profi t % i s 100/1000 == 10 % now same thi ng happened at the ti me of sale he sold 1000 gm but took money for 1100 gm. same profi t i s 10%. now I can explai n i n detai l but I know you w i ll get i t easi ly. Alw ays remember that i n case of Faulty balances there are 2 cases as menti oned above. after calculati on both %tages si mply apply thi s formula a+b+ab/100 so here is 10+10 ( 100/100) = 21%
Hope It w as understandable. Cheers !!!!! Pallav

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Re: Profit and Loss, Discount by re e m a k harbanda - W e dne sday, 18 Nove m be r 2009, 12:46 AM thnk s pallav...
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Re: Profit and Loss, Discount by Pallav Jain - W e dne sday, 18 Nove m be r 2009, 01:33 AM oh ne e d not t be e e !!!!!!
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Re: Profit and Loss, Discount by De v R aj - Sunday, 2 May 2010, 09:14 PM
Hello TG sir, Tonnes of Thanks for the lesson. Reading was never fun until I landed on TG. Sir, I cud not find any lesson on Ratio and proportion. If there is any such lesson, Then can u pls let me the link. Proud to be a TGite. Thanks a ton sir Regards
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Re: Profit and Loss, Discount by afroz m - Saturday, 22 May 2010, 07:37 PM Hi, Thank s a ton...
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Re: Profit and Loss, Discount by R ahul Bhat - Saturday, 14 August 2010, 11:58 AM
C once pt e x plaine d are ve ry lucid. thank s a lot TG.

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Re: Profit and Loss, Discount by chaitanya bolline ni - Monday, 16 August 2010, 11:50 PM HI Sir, I Should have poste d this be fore ...
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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.
W he n i click on C BT C lub it goe s to the hom e page of C BT C lub.. why don't you allow C BT club Stude nts to Dire ctly go to forum of re spe ctive quiz which has que stions re late d to topic which was discusse d.So that we can com ple te that topic. Thank u sir..
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Re: Profit and Loss, Discount by stg jindal - Thursday, 16 De ce m be r 2010, 07:31 PM
awesome article, the entire topic seems to be crystal clear now.

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Re: Profit and Loss, Discount by saanthwana T - Tue sday, 29 March 2011, 06:50 PM He llo sir, This article on Profit and Loss is re ally good. C ould you ple ase post an article on Partne rships also so that all the topics re late d to this are com ple te d? saanthwana
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Re: Profit and Loss, Discount by rahul m ichan - Thursday, 7 April 2011, 09:04 AM he llo hi and thank you for your nice article ........re ally thank s
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Re: Profit and Loss, Discount by Parijat Singh - Thursday, 29 Se pte m be r 2011, 08:28 AM C hange value = change valu 18 =9 100 =50 So ans is 50
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Re: Profit and Loss, Discount by Sirius Black - Friday, 7 O ctobe r 2011, 06:22 PM Hi Sir.. I ne e d to ask you one que stion re garding the solve d e x am ple 5. W he n I did that que stion by m yse lf.. I arrive d at 10% profit. I'm m e ntioning m y assum ptions and m e thod. I'm unable to de te ct the flaw. Ple ase he lp. I assum e d that he bought 1100g for R s. x . Now he sold 1000g for R s. x . Had he sold all the am ount, he would have got x /1000 X 1100= 1.1x Now his profit % is = (1.1x - x )/x X 100= 10% Ple ase le t m e k now if I can se ll 1000g for R s.x or not. Thank you.
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Re: Profit and Loss, Discount by King C asanov - Tue sday, 1 Nove m be r 2011, 03:45 PM @TG saar pls cle ar m y doubt....In e x am ple of Mark e d price , the answe r says it is 44% gre ate r than se lling price ...shouldnt it be 44% gre ate r than C O ST PR IC E ?...I m e an 144= 1.44C P thank s...
The KING
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Re: Profit and Loss, Discount by TG Te am - Tue sday, 1 Nove m be r 2011, 03:49 PM
Yes King You are absolutely correct. It should be read as 44% more than cost price in place of selling price. Kamal Lohia
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Re: Profit and Loss, Discount by Pre rna Golani - Friday, 11 May 2012, 05:03 PM .a we ighing balance shows 900 gm for 1 k g.what is ne t profit pe rce ntage if the trade r m ark s-up his cost price by 20%?? solution:initially the re is a loss of 10% be cause of de fe ct in we ighing balance .as the re is a m ark up of 20%,ne t profit (a+b+(ab/100) =-10+20-(10*20/100)=8% the re fore the re is a ne t profit of 8%... how initially loss is 10%
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Re: Profit and Loss, Discount by cat m e - Friday, 8 June 2012, 04:58 PM Thnx TG, The se post's are a gift to all....
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Re: Profit and Loss, Discount by R im zim Basu - Thursday, 17 January 2013, 02:37 PM I have always be e n a Total Gadha in m aths but this article he lpe d m e unde rstand a lot. Thank s TG. But, I couldn't unde rstand Solve d e x am ple 4 (orange s proble m ). Som e one ple ase e x plain the logic.
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Re: Profit and Loss, Discount by anand chok shi - Monday, 21 January 2013, 03:29 PM Hey please help to solve this question .. A shopk e e pe r bought ce rtain no article s at 1200 rupe e s and sold 1/4th at loss of 10%. what should be the profit pe rce ntage of re m aining stock to e arn 10% profit on ove rall article s?
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Re: Profit and Loss, Discount by am re sh k um ar - Saturday, 26 January 2013, 10:54 PM Tak e 4 article s so C P of e ach article = 300 loss due to 1/4th i.e . 1 article = 30 O ve rall profit = 10% = 120 Le t profit on e ach re m aining 3 article s = x 120 = 1 * (-30) + 3 * x x = 150/3 = 50 so profit on e ach re m aining stock = (50/300)* 100 = 16.67% Howe ve r if u want the answe r in one line (ave rage ) 10% = (-10% *1 + x % * 3 ) /4 x =(50/3)%
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Re: Profit and Loss, Discount by vive k 231 - Tue sday, 29 January 2013, 04:13 PM le t us conside r the no of article s as x and the price of e ach article will be 1200/x
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now it is give n that u shuld ge t ove rall profit of 10% ,which m e ans u shuld ge t 1320 at the e nd it is give n 1/4 of the article s are sold in 10% loss now conside r the de sire d pe rce ntage be y 1/4*x *0.90*1200/x + 3/4*x *y*1200/x =1320 now x will ge t cance lle d and solve the e qquation for ge tting the pe rce ntage re q i think the ans is 17% hope it's right
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CA T 2012 Quant Lessons

Profit and Loss, Discount

the CBT Club this week.

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Hope It w as understandable. Cheers !!!!! Pallav

Re: Profit and Loss, Discount by De v R aj - Sunday, 2 May 2010, 09:14 PM

C once pt e x plaine d are ve ry lucid. thank s a lot TG.

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awesome article, the entire topic seems to be crystal clear now.

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