The most important factor when monitoring the success of your company is its financial performance. Regardless of the size of the company, profit and loss statements allow business owners to carefully monitor financial redundancies and make the necessary adjustments.
All of this is done to maintain the profitability and viability of your company.
A P&L Statement comes with a lot of moving parts from expenditure and revenue, to cost of goods and gross profit. You must carefully consider each of these components if you want your business to succeed. The Profit & Loss Statement guarantees that there won't be any financial hurdles on your path to success!
After you've compiled and organised your financials, you will be able to compare your earnings and losses, allowing you to carefully examine each transaction coming in and out of your business.
Profit margins may vary depending on many factors especially when it comes to your product or service. Look into your own industry to compare your financial performance and profit margins with industry benchmarks.
But it’s not enough! How does it apply to a big company? Or a small company? All these questions and more are answered in this video, where we break down two hypothetical companies’ P&L Statements, compare, and analyse key features.