How to Solve CAT Profit & Loss Questions of Quantitative Ability Section: Formulae, Tips and Tricks

By Aditi Joshi|Updated : April 29th, 2022

The profit and loss topic in the CAT Arithmetic comes under the Quantitative Ability section of the CAT exam. It is an important topic to be prepared, and the aspirants can see that the questions are totally based on the regular transactional activities of a person. The Profit & Loss questions from this part generally use terms like selling price, cost price, market price, loss, discount, and profit. So, a regular transactional-based concept is highly required for the preparation of profit and loss for the CAT exam.

To prepare profit & loss questions for the CAT exam, aspirants have to learn a number of formulae and concepts. Regular practice of profit and loss of CAT previous year questions along with CAT mock test will help the candidates ace this section.  Read the article to understand the important concepts of profit and loss.

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Important Profit and Loss Concepts for CAT Exam

Profit and Loss is an important topic asked in the CAT Exam. Usually, 1-2 questions are asked from this topic in the CAT Exam. 

Some basic profit and loss concepts for CAT are mentioned below:

CAT Profit & Loss Related Terminologies 

  • Selling Price (S.P): It is the price at which the product is being sold
  • Cost Price (C.P): The price at which the product is purchased.
  • Profit is when the selling price is higher than the cost price (S.P> C.P).
  • Loss: When the selling price is lower than the cost price (S.P< C.P).

Important Profit and Loss Formulae for CAT Exam

So, if you want to find the amount of Profit, then it is

  • Profit =S.P- C.P

On the other hand, the amount of loss will be 

  • Loss= C.P- S.P

Profit % and Loss %

It is expressed as a profit and loss percentage of the cost price. The aspirants must follow the following two formulas to find this value.

  • Profit % =(Profit/C.P)*100
  • Loss % = (Loss/C.P)*100 

Formulae for Selling Price

  • Selling price = Cost price + Profit
  • Selling price = Marked or List price – Discount
  • Selling price = (100+Profit)/100 × Cost price
  • Selling price = (100−Loss)/100 × Cost price

Same Selling Price with Loss and Profit

Let two materials be sold at the same price in a way that one can earn a profit on one of those materials and incur a loss for the other one. But the profit and loss percentage will be the same. In these types of cases, the selling prices are immaterial.

Suppose the same price is S, and the profit and loss percentage will be X%, so the formula will be

  • Loss %= (X/10)^2
  • Value of loss = 2S *  x² / 100 ²- x²

Tricks to Remember Profit and Loss Concepts for CAT Exam

Answering the profit and loss questions in the CAT exam is sometimes tricky, and the aspirants must have a grip on all the related formulae. Here are a few experts tips to remember : 

  • Make a formula sheet that must be revised every day. 
  • Make shortcuts for all important highlighted notes related to profit and loss.
  • Practise previous years' questions to understand the difficulty level for each question.
  • Do practice mental maths to improve your calculation skills.
  • Learn from mistakes and retry the questions again and again about what has been done wrong.

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