This document defines key terms used in profit and loss calculations such as cost price, selling price, profit, loss, profit percentage, loss percentage, and how to calculate profit, selling price when given cost price and profit percentage. It also defines marked price, mark up percentage, how to calculate marked price from cost price and mark up percentage. Finally, it defines discount, discount percentage and how to calculate selling price when given marked price and discount percentage.

2. Cost Price (CP): Price of purchasing goods
Selling Price (SP): Price at which goods are
sold
Profit (P): If SP > CP; that is if you sold at a
price higher than your purchase price
P=SP-CP
Loss (L): If SP < CP; that is if you sold at a
price lower than your purchase price
L=CP-SP

3. We often express or use percent profit (p%)
or percent loss (l%) rather than speaking
actual value of profit or loss. This percent
profit or loss is calculated as percentage
of the cost price unless otherwise stated.
Profit Percentage = (P/CP) x 100
Loss Percentage = (L/CP) x 100

4. To calculate Profit when CP and profit %
are given
Profit, P = CP x (p/100)
To calculate SP when CP and profit% are
given, first calculate Profit using above
formula and then
SP = CP + Profit

5. To calculate Loss when CP and loss% are
given
Loss, L = CP x (l/100)
To calculate SP when CP and loss% are
given, first calculate Loss using above
formula and then
SP = CP-Loss

6. The sellers after purchasing an item
usually tag it with a price which is higher
than the price at which they purchased
it. This higher price marked up is called
Marked Price (MP)
The amount by which the seller has
marked up the cost price is also
expressed as percentage of CP and is
called mark up percentage (m%)

7. Mark up percentage,
m% = [(MP-CP)/CP] x 100
Rearranging this formula we get
MP = CP[1+(m/100)]

8. Seller usually initially responds to a customer by
telling marked price and when the customer bargains
he sometimes reduces the price and the price at which
the two parties agrees upon becomes the selling price.
The amount by which MP is reduced to arrive at the
selling price is called Discount (D).
D=MP-SP
Discount is expressed as percentage of marked price
Discount percentage, d = [(MP-SP)/MP] x 100
Reshuffling this formula we get Selling Price
SP = MP[1-(d/100)]