# Partnership: Formulas and Shortcuts to calculate Profit Sharing

**Partnership** is an important concept of Quantitative Aptitude Section as questions from this topic is frequently asked in the competitive exams. The concept of “**Ratio and Proportion”** plays an important role in solving questions based on this topic.

**Also, learn the formulas and shortcuts for Ratio & proportion**

**Meaning**:

When two or more than two persons run a business jointly, they are called partners in that business and the deal between them is known as partnership.

There are two types of partners in the business:

**Working Partner**: A person who manages the business is known as working partner.**Sleeping Partner**: A person who simply invests the money is known as sleeping partner.

*Important Formulae**:*

*Important Formulae*

- Suppose two persons
**P and Q invests Rs. X and Rs. Y respectively for a year**in a business, then their share of profit or loss at the end of the year:

** **

- Suppose two persons
**P and Q invests Rs. X for m month and Rs. Y for n months respectively**, then

** **

**When****investments are altered in the given period**we need to take the changes into consideration while calculating their profits.

**Example:**

Suppose, A and B started their business with Rs.5000 and Rs.10000 respectively.

If after three months A invested another Rs.5000 then we have to consider A's capital for the remaining period is Rs.10000.

**Learn the basic concept of Percentages**

*Solved Example*

Here is an example to understand the basic concept and formulas of Partnership:

**Example:** A started a business investing Rs. 50,000 in 2015. In 2016, he invested an additional amount of Rs. 20,000 and B joined him with an amount of Rs. 70,000. In 2017, B invested another additional amount of Rs. 20,000 and C joined them with an amount of Rs. 70,000. What will be A’s share in the profit of Rs. 210000 earned at the end of 3 years from the start of the business in 2015?

Answer: Calculating the ratio of A, B and C:

** **

So basically questions based on partnership mainly focus on **two factors** which are:

• Profit shares of Partners and

• Time Period of their respective Investments.