Important Formulas - Partnership - Tricks & Shortcuts

1) Partnership: When two or more than two persons run a business jointly, they are called partners and the deal is known as partnership.

2) Ratio of Divisions of Gains:
I) When investments of all the partners are for the same time, the gain or loss is distributed among the partners in the ratio of their investments.

Suppose A and B invest Rs. x and Rs. y respectively for a year in a business, then at the end of the year:

(A's share of profit) : (B's share of profit) = x : y.

II) When investments are for different time periods, then equivalent capitals are calculated for a unit of time by taking (capital x number of units of time). Now gain or loss is divided in the ratio of these capitals.

Suppose A invests Rs. x for p months and B invests Rs. y for q months then,

(A's share of profit) : (B's share of profit)= xp : yq.

3) If n parnters are investing for different period of time then

Suppose p1 invest Rs C1 for T1 months, P2 invests C2 Rs. for T2 months and Pn invests Rs. Cn for Tn months so on....

(P1's share of profit) : (P2's share of profit) :........: (Pn's share of profit): C1*T1 : C2*T2 : ..... : Cn*Tn

4) A partner who manages the the business is known as a working partner.

5) A Partner who simply invests the money is a sleeping partner.

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