Aptitude Partnership Concepts and Formulas

Points to remember:

1) Partnership: It refers to a business association between two or more than two persons who run a business together and share the total profit at an agreed proportion. The persons who enter into a partnership are called partners.

2) Working partner: A partner who is actively involved in the business and manages the business is known as an active partner.

3) Sleeping partner: A partner who invests money but does not involve or look after the business is known as a sleeping partner.

4) Simple partnership: It refers to a partnership in which each partner invests capital for the same period.

5) Compound partnership: It refers to a partnership in which the partners invest capital for different periods.

Some Quicker Methods:

1) If two partners invest capital Rs. C1 and Rs. C2 for the same period and earn profit Rs. P, the share of the partners in the profit is given by;
Rs and Rs

Similarly, If there are three partners who invest Rs. C1, Rs. C2 and Rs. C3 for the same period and earn total profit Rs. P, the shares of the partners in the profit are given by;
Rs , Rs ,Rs

2) If two partners invest capital Rs. C1 and Rs. C2 for different periods T1 and T2 respectively and earn total profit Rs. P, shares of the partners in the profit are given by;
Rs and Rs

Similarly, if there are three partners who invest Rs. C1, Rs. C2 and Rs. C3 for different periods T1, T2 and T3 respectively and earn total profit Rs. P, the shares of the partners in the profit are given by:
Rs , Rs and

3) If two partners invest capital C1 and C2 for the periods T1 and T2, respectively, the ratio of their profits is given by:
=

Similarly, if three partners A, B, and C invest Rs. C1, Rs. C2 and Rs. C3 for different periods T1, T2, and T3 respectively then the ratio of their profits is given by:

Profit of A: Profit of B: Profit of C = C1*T1: C2*T2: C3*T3

If three partners invest capital in the ratio C1: C2: C3 and earn a profit in the ratio P1:P2: P3, the ratio of the time for which they have invested capital is given by:
T1:T2:T3 = ∗ ∗