Profit, Loss and Discount
beginner26 min read
Cost price, selling price, marked price and discount; profit and loss as percentages of cost price; the marked-up-then-discounted chain; and why selling two items at the same price for equal gain and loss percentages always loses money.
What you will be able to do
- Use cost price, selling price and marked price correctly, and know which is the base for each percentage.
- Convert between a profit or loss percentage and a single multiplier on cost price.
- Handle a mark-up followed by a discount in one calculation.
- Explain and compute the standard 'same selling price, equal gain and loss percent' result.
What is inside this lesson
- 1Four prices, and what each means
- 2Core relationships
- 3Mark up, then discount
- 4Worked example: mark-up and discount
- 5Worked example: recover the cost price
- 6Worked example: same price, equal percent gain and loss
- 7Common mistakes
- 8Quick revision
- 9Practice
Get Pro for full access. This is section 1 of 9; the rest of the lesson opens with Pro at onelystop.in/upgrade.
Four prices, and what each means
Commercial-maths questions turn on four quantities.
- Cost price (CP): what the seller paid, including any freight or overhead the question adds in.
- Selling price (SP): what the buyer actually pays.
- Marked price (MP), or list price: the tag price, before any discount.
- Discount: a reduction from the marked price.
Profit and loss are always measured against cost price. Discount is always measured against marked price. Keeping those two bases straight removes most errors in this topic.
The lesson itself is for members
Reading the 9 sections above is free. A free account opens the first 2 topics of every subject in full, along with flashcards and private notes.