Shortcut Trick
In a partnership, Profit Ratio = Investment Ratio × Time Ratio.
Directly multiply the respective values for A, B, and C to find their profit shares.
Profit Ratio = (4 × 3) : (5 × 2) : (6 × 1)
Profit Ratio = 12 : 10 : 6 = 6 : 5 : 3
∴ The correct answer is 6:5:3.
Alternate Method
Given:
Investment ratio of A, B, and C = 4 : 5 : 6
Time ratio of A, B, and C = 3 : 2 : 1
Formula Used:
Profit = Investment × Time
Partner A Invest = 4 Time = 3 Profit = 12 Partner B Invest = 5 Time = 2 Profit = 10 Partner C Invest = 6 Time = 1 Profit = 6 Profit Ratio = 12 : 10 : 6 → 6 : 5 : 3
Calculation:
⇒ Let the investments of A, B, and C be 4x, 5x, and 6x respectively.
⇒ Let the time periods for A, B, and C be 3y, 2y, and 1y respectively.
⇒ Profit of A = 4x × 3y = 12xy
⇒ Profit of B = 5x × 2y = 10xy
⇒ Profit of C = 6x × 1y = 6xy
⇒ Ratio of their profits = 12xy : 10xy : 6xy
⇒ Cancelling xy from all terms, Ratio = 12 : 10 : 6
⇒ Simplifying the ratio by dividing by 2, Ratio = 6 : 5 : 3
∴ The correct answer is 6:5:3.
Additional Information
Simple vs Compound Partnership
In a simple partnership, capitals are invested for the same time, and profit is divided solely in the ratio of the capitals. In a compound partnership, capitals are invested for different time periods. Here, Profit Ratio = (C1 × T1) : (C2 × T2).
Working / Active Partner
An active partner manages the business and receives a fixed salary or percentage of the profit for their work. The remaining profit is then distributed among all partners according to their investment and time.
Joining Mid-way
If a partner joins the business 'n' months after it starts in a given year, their investment time period becomes (12 − n) months for the purpose of calculating their final profit share.