Report Analysis - How to Read the Statements

Gross Profit Margin

The difference between the sales price and the cost of the product or service rendered is known as gross profit margin in business.  It is traditionally the amount identified on the income statement or a […]

Report Analysis - How to Read the Statements

Net Profit Margin

The net profit margin reflects the profitability of the company as a percentage of net sales.   It is one of the performance ratios used in evaluating business.   Interestingly, some consider it the most important ratio.   […]

Report Analysis - How to Read the Statements

Inventory Turnover Rate

One of the many ratios used in business, the inventory turnover rate is often misunderstood, miscalculated and misused.  The traditional business course in academia explains that ideally the inventory turnover ratio (rate) is the highest […]

Transportation

Business Dynamics of Hauling

One of the industries in the transportation sector is materials hauling.  This is your dump truck industry.  All of us see these trucks out on the highway usually hauling gravel or dirt.  To profit well, efficiency […]

Construction Industry

Margins in Construction

I’ve been asked to identify the average margins in the construction industry.  Honestly, there is no such thing.   I tried and after several hours of research I couldn’t even get one of the types of […]

Business Principles Start-Up

Types of Business Models

In business there are four distinct business models.  Just about any business can be identified with one of the four.  The following are the four types of business models: Low-Volume, Hi-Margin Hi-Volume, Hi-Margin Low-Volume, Low-Margin […]

Hospitality

Absolute Dollars

In the hospitality industry, there is one financial tenet that takes precedence over any other business perspective.  In this industry, it is about putting the maximum number of dollars (ABSOLUTE DOLLARS) in the register after […]

Terminology

Profit

Profit refers the earnings from the business operations.  It customarily means the bottom line of the business income statement or its profit and loss statement.  For many business owners, it refers to the amount earned […]