Sale Price, Gross Margin determination – Simple Trick
I am going to share with you one trick which one great teacher, Mr S.K. Jha taught me. Simple arithmetical problems of
Finding out selling price, when cost price and margin (percentage of profit on Sale) are given. Or,
Finding out cost price when Sale price is given and percentage of profit on cost is given.
Finding out the markup when cost price and Sale price are given.
We all have seen occurrence of such problems in our academic life and daytoday life. All the time we need a paper – pen or a calculator. But now with the process given below I believe we can solve any such problem in our mind.
To keep it simple, I will use the same language used by Mr. Jha (Sir) to explain me when I was kid.
Relation between Cost Price and Sale Price
If profit = ½ of cost = 1/3 of sales
If profit = 1/3 of cost = 1/4 of sales
If profit = 1/4 of cost = 1/5 of sales
If profit = 1/5 of cost = 1/6 of sales


If profit = 1/49 of cost = 1/50 of sales
and so on
Generalization of above method
1/x of cost = 1/(x+1) of sales.
i.e. adding 1 to the denominator if you are moving from cost to sales .
subtracting 1 from the denominator if you are moving from sales to cost
Sir asked me, “isn’t it very simple. You just have to convert any percentage into fraction and apply the above method.”
I was amazed by the simplicity of the concept, but a question cropped up in my mind. What if the numerator is not equal to 1?
He had the answer ready, “You can convert any numerator into 1. Say for example you need to earn 60% margin on an article worth (costing) Rs. 40
Now, Profit = 60 % of sales = 60/100 of sales = 3/5 of sales = 1/(5/3) of sales
Now, Profit = 1/(5/3) of sales = 1/(5/3 – 1) of cost = 1/(2/3) of sales = 3/2 of cost
Now since, cost price = 40, Profit = 40 * 3/2 = 60 , sale price = 40+60 = 100
Alternative method,
Add the numerator to the denominator, when moving from cost to sales.
150 % of cost = 3/2 of cost = 3/(2+3) of sales = 3/5 of sales = 60 % of sales
Deduct the numerator from the denominator, when moving from sales to cost.
For example take the above case, 60/100 of sales = 60/40 of cost = 3/2 of cost
If you want to share such simple tricks with other via QuickerMaths.com, send them across to me @ vineetpatawari@gmail.com
what if I some one sold goods of 27000 rupees. with the 118.75% profit what is the purchasing amount of sale.
What will happen if I have 125% profit on sales? What is the profit on cost then? I guess this trick doesn’t work where profit on sales exceeds 100%
Profit % on sales can’t be greater than 100. So the trick will apply in all cases!
well…i already knew this trick my friend told me a year ago…jst refreshed my memory,,…very useful trick,,,100% full proof…
I have buying price,selling price and profit margin.I need to calculate my profit in percentage.I created two formulas for that.But confused that which is right.
(1) profit x 100 /selling price
(2) profit x 100 /buying price.
Which is right?
profit margin has selling price as denominator.
profit percentage in mathematics has cost or buying price has denominator.
In your case, option (2) is correct.
how is that poss?
if u want to earn 60% profit on Rs.40 and selling it for 100. Then profit % will be (10040)/40 x 100=150% not 60%
check ur question again
very complicated language
Yea!!! Really GR8…
Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!
@ Anupma Gupta – He is indeed a great teacher. Thanks for the appreciation. It’s very encouraging.
your teacher Mr Jha must be too good. this is an awesome trick.hats off !!!