Profit, loss, and discount concepts is majorly involved in business transactions. Its concept helps in solving different life situations. Basics in the percentage concept help in solving these problems easier. When a person is doing a business he involves in purchase and sales of items, obviously, his motto is to gain profit on the items and here he faces profit or loss in business.

## Commonly Used Terms In Profit And Loss Concepts

**cost price:**

It is the price at which an article is purchased and represented as C.P.

**Selling Price:**

It is the price at which an article is sold and represented as S.P.

**Marked Price:**

It is the price of an article on the label and represented as M.P.

**Discount:**

It is the reduction of price made on the marked price of an article.

**Profit/Gain:**

If the selling price of an article is greater than the cost price then there is a profit/gain.

profit/gain = S.P – C.P

**Loss:**

If the cost price of an article is more than selling price then there is a loss.

Loss = C.P- S.P

**Overheads/Overhead expenses:**

when an article is purchased additionally expenses such as labor charges, commissions, transport charges e.t.c are added to cost price. These expenses made are called overhead expenses.

## Some Important Formulas Of Profit And Loss

- If S.P > C.P then there is a profit and profit = S.P – C.P

\begin{align*}

Profit \ \% =\dfrac {profit}{C\cdot P}\times 100 \\ \\ = \dfrac { S.P – C.P }{C\cdot P}\times 100 \end{align*} - If C.P > S.P then there is a loss and loss = C.P – S.P

\begin{align*}

loss \ \% =\dfrac {loss}{C\cdot P}\times 100 \\ \\ = \dfrac { C.P – S.P }{C\cdot P}\times 100 \end{align*} - If A sells an article to B at a% profit/loss and B sells it to C at b% profit/loss then,
*Total profit/loss percentage is*

\begin{align*}\left( a\pm b\pm \dfrac {ab}{100}\right) \% \end{align*} use positive sign for profit

use negative sign for loss. - If the selling of two similar articles is the same. p% of profit and p% of loss is obtained by selling those articles then,
*there is always a loss of*

\begin{align*} \dfrac {P^{2}}{100}

\end{align*} - A dishonest shopkeeper sells his goods at cost price but uses false weights then

*Profit % is*

\begin{align*}

\dfrac {Original \ weight-False \ weight}{False \ weight}\times 100 \end{align*}