Shortcut Trick
Effective Capital = Capital × Time
A's effective capital = (6 × 3) + (5 × 6) = 18 + 30 = 48
B's effective capital = (4 × 3) + (5 × 6) = 12 + 30 = 42
C's effective capital = 5 × 9 = 45
Ratio = 48 : 42 : 45 = 16 : 14 : 15
∴ The correct answer is 16:14:15.
Alternate Method
Given:
Initial investments: A = Rs. 6,00,000, B = Rs. 4,00,000, C = Rs. 5,00,000
After 3 months: A withdrew Rs. 1,00,000; B added Rs. 1,00,000
Total time of partnership = 9 months
Formula Used:
Ratio of Profit = Ratio of Effective Capital = (C1 × T1) : (C2 × T2) : (C3 × T3)
A 6L × 3m 5L × 6m B 4L × 3m 5L × 6m C 5L × 9m 0 3 Months 9 Months
Calculations:
⇒ A's investment for first 3 months = Rs. 6,00,000
⇒ A's investment for remaining 6 months = 6,00,000 − 1,00,000 = Rs. 5,00,000
⇒ A's effective capital = (6,00,000 × 3) + (5,00,000 × 6) = 18,00,000 + 30,00,000 = Rs. 48,00,000
⇒ B's investment for first 3 months = Rs. 4,00,000
⇒ B's investment for remaining 6 months = 4,00,000 + 1,00,000 = Rs. 5,00,000
⇒ B's effective capital = (4,00,000 × 3) + (5,00,000 × 6) = 12,00,000 + 30,00,000 = Rs. 42,00,000
⇒ C's investment for entire 9 months = Rs. 5,00,000
⇒ C's effective capital = 5,00,000 × 9 = Rs. 45,00,000
⇒ Ratio of their effective capitals = 48,00,000 : 42,00,000 : 45,00,000
⇒ Canceling 1,00,000 from all terms, Ratio = 48 : 42 : 45
⇒ Dividing by 3, Ratio = 16 : 14 : 15
∴ The correct answer is 16:14:15.
Additional Information
Simple Partnership
When all partners invest their capital for the exact same period, profits are distributed strictly in the ratio of their original investments.
Compound Partnership
When partners invest different amounts for different time periods, profits are distributed in the ratio of their effective capitals (calculated as Capital × Time).
Active and Sleeping Partners
An active partner receives a fixed salary or a certain percentage of total profit for managing the business operations, while the remaining profit is shared among all partners according to their effective capital ratios.