Year 9: Financial mathematics - Profit, loss, markup and discount

This cheat sheet covers key concepts related to profit, loss, markup, and discount – important for understanding business transactions.

Profit and Loss

Profit: When a business makes more money from sales than it spends. Calculated as: Revenue - Cost of Goods Sold (COGS) = Profit

Loss: When a business spends more money than it earns from sales. Calculated as: Revenue - COGS = Loss

Markup

Markup: The amount added to the cost of a product to determine its selling price. Often used for retail businesses.

Markup Percentage: (Markup Amount / Cost) x 100. The markup percentage is applied to the cost to find the markup amount.

Selling Price = Cost + Markup Amount

Discount

Discount: A reduction in the normal price of a product or service, usually offered to encourage sales.

Discount Percentage: (Discount Amount / Original Price) x 100

Sale Price = Original Price - Discount Amount

Example

Cost: $50 Markup Percentage: 20% Selling Price: $50 + ($50 x 0.20) = $60

Original Price: $80 Discount Percentage: 10% Sale Price: $80 - ($80 x 0.10) = $72