Profit & Loss — The Complete Basics
Cost price, selling price, and every profit/loss formula explained with a chai-shop analogy and shortcuts.
By the PadhoDost Team · 📖 7 min read · Updated 4 August 2026
Part of SSC CGL & Banking prep🧠 The chai-shop model
Imagine you run a chai stall. You spend ₹10 to make one cup — that's your Cost Price (CP). You sell it for ₹13 — that's your Selling Price (SP). The extra ₹3 you keep is your Profit. If you'd sold it for ₹8 instead, you'd have a Loss of ₹2. Every profit-and-loss question is just a twist on this.
The two core formulas
Every formula in one table
| To find | Formula |
|---|---|
| Profit % | (Profit / CP) × 100 |
| Loss % | (Loss / CP) × 100 |
| SP (given Profit%) | CP × (100 + P%) / 100 |
| SP (given Loss%) | CP × (100 − L%) / 100 |
| CP (given SP & Profit%) | SP × 100 / (100 + P%) |
Worked example
📝 A watch costs ₹800 and is sold at 25% profit. Find the SP.
Formula: SP = CP × (100 + P%) / 100
SP = 800 × 125 / 100 = ₹1000
⚡ Shortcut: 25% of 800 = 200, so SP = 800 + 200 = ₹1000
Remember
- ✓SP > CP → Profit
- ✓SP < CP → Loss
- ✓SP = CP → No profit, no loss
- ✓% is on CP, always
⚡ Quick check
A book bought for ₹500 is sold for ₹450. What is the loss %?
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