Quantitative Aptitude Partnership Study Material
Partnership is a form of association of two or more persons who contribute their resources like money in order to carry on a certain business together. It may be of simple or compound type.
Simple Partnership is one in which the capitals of the partners are invested for the same time. The profits or losses are divided among the partners in the ratio of their investments.
Compound Partnership is one in which the capitals of the partners are invested for different periods. In such cases equivalent capitals are calculated for a unit time by multiplying the capital with the number of units of time. The profits or losses are then divided in the ratio of these equivalent capitals. Thus the ratio of profits is directly proportional to both capital invested as well as time.
Simple Partnership is one in which the capitals of the partners are invested for the same time. The profits or losses are divided among the partners in the ratio of their investments.
Compound Partnership is one in which the capitals of the partners are invested for different periods. In such cases equivalent capitals are calculated for a unit time by multiplying the capital with the number of units of time. The profits or losses are then divided in the ratio of these equivalent capitals. Thus the ratio of profits is directly proportional to both capital invested as well as time.
A partner who participates in the working and manages the business is called a Working Partner while the one who only-invests capital but does not participate in the working of the business is called a Sleeping Partner. A working partner gets either monthly payment or a part of the profit for his contribution in the management of the business. This payment is deducted from the total profit before its distribution.
It is advisable to do thoroughly the chapter on “Ratio and Proportion” as its concept will be used extensively in this chapter.
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