Partnership - Formula Sheet
🤝 Partnership - Formula Sheet
🎯 Basic Formulas
Profit Sharing Ratio
Profit Ratio = Investment₁ × Time₁ : Investment₂ × Time₂ : …
Individual Share
Share = Total Profit × (Individual Factor) / (Sum of All Factors)
Working Partner’s Commission
Commission = Total Profit × Commission Rate / 100 Remaining Profit = Total Profit - Commission
📊 Different Cases
Equal Investment, Different Time
Share Ratio = Time₁ : Time₂ : Time₃
Different Investment, Equal Time
Share Ratio = Investment₁ : Investment₂ : Investment₃
Different Investment, Different Time
Share Ratio = I₁ × T₁ : I₂ × T₂ : I₃ × T₃
🔢 Special Cases
Sleeping Partner
Sleeping Partner Share = Investment × Time Working Partner Share = Investment × Time + Commission
Investment Changes
For period 1: I₁ for T₁ months For period 2: I₂ for T₂ months Total Investment = I₁ × T₁ + I₂ × T₂
Salary to Working Partner
Net Profit = Total Profit - Salary - Commission Remaining profit shared in investment ratio
⚡ Quick Calculations
Monthly Investment
If investment changes during year: Annual Investment = Σ(Investment × Months)
Missing Partner
If one partner leaves mid-year: Consider only their active months
📝 Solving Steps
- Identify investments and time periods
- Calculate factors (Investment × Time)
- Find the ratio
- Apply to total profit
- Consider commission/salary if applicable
🔍 Important Notes
- Time always in same units (months/years)
- Investment = capital contribution
- Commission usually % of profit
- Salary fixed amount, not percentage
Master Partnership - Investment × Time determines share! 🤝
BETA
