🗺️ Chapter Roadmap
1 Basic Business Terms
To understand business math, you must first know the three main types of prices used in buying and selling:
Cost Price (CP)
The Buying Price
The price at which a shopkeeper buys an item from a factory or wholesaler.
Selling Price (SP)
The Final Price
The price at which the item is finally sold to the customer.
Marked Price (MP)
The Tag Price
The price written on the tag. This is usually higher than the SP (before discount).
2 Profit vs. Loss
Whether a business makes money or loses money depends entirely on the relationship between CP and SP:
Profit (Gain)
You make a profit when you sell something for MORE than you paid for it (SP > CP).
Loss
You suffer a loss when you sell something for LESS than you paid for it (CP > SP).
3 The Golden Rule of Percentage
This is the most common trap in competitive exams (NTS, PPSC, SAT). Students often divide by the Selling Price by mistake. Always remember:
⚠️ The "CP is Base" Law
Profit Percentage or Loss Percentage is ALWAYS calculated on the Cost Price (CP).
4 Discount & Marked Price
A discount is a reduction offered on the Marked Price (MP). When a shopkeeper gives you a discount, he is selling the item at a price lower than the tag price.
Important Note: Just as Profit is based on CP, Discount is ALWAYS based on MP.
📝 Deep Concept Example:
A shirt is marked at $1000. It is sold with a 10% discount. What is the Selling Price?
10% of $1000 = $100
$1000 - $100 = $900