We will try to understand how to make Business and finance decisions. Business and finance are common term ,but they are not always used appropriately. So we will understand how to take a proper decision on right time.
What is Business Analysis
Business Analysis is ability to understand building a blocks of how a business make a money
Finance analysis is an understanding of what finance data means and how to act on it
Profit and loss
Every company uses a budget to communicate expectations for company financial performance, also know as profit. recognizing how day today business operation affect each line of the profit and loss statement and hoe it relates to the budget
profit occurs when revenues exceed expenses
Revenue -Expenses = Profit or loss
Think about how bank account work
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Profit and loss calculation it is key parameter for making Business and Finance Decisions
We know that growing a business is about seeking and capturing sales opportunities, while at the same time making a right investment for the right product at right time .In a well run business . when sales increase and expenses are controlled, the profit contribution should increase as well.
What is profit and loss statement
Profit and loss statement show the report of company . That company is growing our making losses . This analysis is important because help to understand which steps to be take for future to grow and to sustain a business . Its also help to investor to invest a money in company .
About monthly P&L report (profit and loss statement) so what its contain let see
Profit and loss formula.
– cost of goods sold(COGS)
= store margin
– total controllable expenses
= controllable contribution
– total occupancy cost and additional expenses
– pre- opening expenses
= total contribution
Profit and loss statement help you to analysis your financial statement and to find out the way to solve a problem .Because it is key parameter for making Business and Finance Decisions.
So friends I hope this article help you For more detailshttps://www.thinkingcapital.ca/resources/how-to-make-critical-financial-decisions-for-your-business/