Profit and Loss Formulas, Concepts, Short Tricks and Tips

Profit and Loss is a crucial topic in the Quantitative Aptitude section of competitive exams. It revolves around basic arithmetic concepts like cost price, selling price, discounts, and profit or loss percentages concepts commonly used in real-life business or trading scenarios. In this blog, we have provided important formulas, quick tricks, question types, solved examples from 2024–25 exams, and more.

What Is Profit and Loss in Quantitative Aptitude?

In simple terms, Profit and Loss helps evaluate the financial outcome of buying and selling transactions.

• Profit: When the Selling Price (SP) is more than the Cost Price (CP).
• Loss: When the Cost Price (CP) is more than the Selling Price (SP).

Why Is It Asked in Exams?

• Real-life application in business, trade, and financial reasoning.
• Tests accuracy in percentage, ratio, and basic arithmetic.
• Can be solved quickly using standard formulas.

Skills Required:

• Basic arithmetic operations
• Percentages
• Logical calculation
• Formula application

Why Is Profit and Loss Important in Competitive Exams?

Profit and Loss is frequently tested across government and banking exams.

Exam	No. of Questions	Difficulty
SSC CGL / CHSL	1–2	Easy
IBPS PO / SBI PO	1–2	Moderate
RRB NTPC / Group D	1	Easy
State PSC / Police	1–2	Moderate

Profit and Loss Quantitative Aptitude Short Notes

To save revision time, here are the most important concepts in a table:

Concept	Definition
Cost Price (CP)	The price at which an article is bought
Selling Price (SP)	The price at which the article is sold
Profit	SP – CP
Loss	CP – SP
Profit %	(Profit / CP) × 100
Loss %	(Loss / CP) × 100
Marked Price (MP)	The price printed/tagged before any discount
Discount	Reduction on the MP, usually in %
SP (after discount)	SP = MP × (1 – Discount/100)

Profit and Loss Concepts

The concepts mostly used to solve Profit and Loss questions are as follows:

Concept	Details
Profit = SP – CP	Positive difference when SP > CP
Loss = CP – SP	Negative difference when CP > SP
Profit % = (P/CP) × 100	Always calculated on CP
SP = CP × (1 + Profit%)	For gain situations
SP = CP × (1 – Loss%)	For loss situations
CP = SP / (1 + Profit%)	To find CP when profit % is known
Net % Change (Two gains/losses)	= A + B + (AB/100) if both are gain/loss

What Are the Types of Profit and Loss Questions in Quantitative Aptitude?

In exams, questions may vary in logic and application:

• Direct Calculation Questions – Using basic CP/SP/Profit/Loss formulas
• Marked Price & Discount Problems – Involving multiple percentage changes
• Successive Profit or Loss – Two-step percentage changes
• Dealer Dishonesty Problems – Using less weight or faulty measures
• Wrong Selling Price/Cost Price Given – Requiring back-calculation
• Combined Transactions – Finding net gain/loss across items

Profit and Loss Formulas for Quantitative Aptitude

The must-know formulas for fast calculation:

• Profit = SP – CP
• Loss = CP – SP
• Profit % = (Profit / CP) × 100
• Loss % = (Loss / CP) × 100
• SP = CP × (1 + Profit/100)
• SP = CP × (1 – Loss/100)
• CP = SP / (1 + Profit/100)
• CP = SP / (1 – Loss/100)
• SP = MP × (1 – Discount/100)
• Net % Gain/Loss (Successive): A + B + (AB / 100)
  (Where A and B are % gain or loss in two steps)

Profit and Loss Tricks for SSC CGL and Other Exams

Some fast and effective tricks to solve problems in less time:

1. Assume CP = ₹100 to simplify % calculations
2. Use fractional equivalents of % (e.g., 25% = 1/4) for mental math
3. Net % shortcut for two-step changes: A + B + (AB/100)
4. In dishonest dealer problems, use the concept:
   Profit % = (Error / Actual) × 100
5. Back-calculate from SP when reverse logic is used in the question

Solved Profit and Loss Questions from 2024–25 Exams

Asked in SSC CGL 2024 Tier 1 – Shift 3

Q: A man sells a pen for ₹230 and earns 15% profit. What was the cost price?
Solution:
CP = 230 / 1.15 = ₹200
Answer: ₹200

From IBPS Clerk Prelims 2024 – Mock

Q: A shopkeeper gains 20% after giving a 10% discount. Find markup %.
Solution:
Let CP = ₹100. Gain = ₹20 → SP = ₹120
SP = MP × 0.90 → MP = ₹120 / 0.90 = ₹133.33
Markup% = 33.33%
Answer: 33.33%

RRB NTPC 2024 – Based on Memory

Q: CP = ₹500, sold at a loss of 10%. Find SP.
Solution:
SP = 500 × (1 – 0.10) = ₹450
Answer: ₹450

SBI PO Mains 2025 – Mock Test

Q: A dealer uses 900g instead of 1kg, still sells at CP. Find his profit %.
Solution:
Profit% = (100/900) × 100 = 11.11%
Answer: 11.11%

Profit and Loss Concepts for Bank Exams

Bank exams like IBPS PO and SBI PO often include layered or logic-heavy questions involving:

• Successive discounts or gains
• Mark price with multiple conditions
• Dealer cheating scenarios

Example:
Marked price is 40% above CP. After a 20% discount, what is profit %?

Let CP = ₹100
MP = ₹140 → SP = 140 × 0.80 = ₹112
Profit = ₹12 → Profit % = 12%

Common Mistakes to Avoid while Solving Profit and Loss

While solving questions, you should keep the following details in mind:

1. Calculating % on SP instead of CP – Always base % on CP
2. Forgetting to adjust for discounts on MP
3. Ignoring unit mismatch – especially weight vs. price
4. Incorrect use of successive % formula – only use when two transactions are involved
5. Assuming linear change – % change is not additive without proper formula

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