Mastering CAT Exam: Essential Profit and Loss Concepts with Time

Profit and Loss, Basic Concepts and Shortcuts for the CAT Exam can be easily solved by understanding the concepts of percentages. Here are some basic terms that are commonly used when solving profit and loss problems:

Cost Price (C.P): The price at which an article is bought.
Selling price (S.P): The price at which an article is sold.
Profit: When an article is sold for more than its cost, it results in a profit or gain. The formula to calculate profit is Profit = S.P – C.P.
Loss: When an article is sold for less than its cost, it results in a loss. The formula to calculate loss is Loss = C.P – S.P.

For example, Brijesh purchased a book for Rs.1260 and sold it to Rakesh for Rs.1320. Rakesh then sold it to Kishore for Rs.1400. To determine who gained more and by how much, we can calculate the profit for each transaction. Brijesh’s profit is Rs.60 while Rakesh’s profit is Rs.80. Therefore, Rakesh gained Rs.20 more than Brijesh.

Profit or loss can also be expressed as percentages of the cost price. The formula to calculate net profit percentage is:

Net profit percentage = (Selling price of X articles / Cost price of Y articles) * 100%

For example, if the selling price of 10 articles is the same as the cost price of 11 articles, we can calculate the profit or loss percentage. In this case, the profit percentage is:

Profit percent = ((Selling price of X articles – Cost price of X articles) / Cost price of X articles) * 100%

When two products are sold at the same price, with one product earning a profit and the other incurring a loss, the net result of the combined transaction would be a loss. The selling price in such cases is immaterial.

For example, if two articles are sold at Rs.198 each, with a 10% profit on one and a 10% loss on the other, the net profit/loss on the two transactions combined would be a loss of Rs.4.

Understanding these basic concepts and shortcuts will help in solving profit and loss problems quickly and accurately in the CAT exam.

Shortcut: Recommended: Profit and Loss Practice Problems

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