Tag: Accounting Principles – Profit and Loss
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House Flipping – Business Dynamics
There is a lot of misinformation about flipping real estate on the internet and on television. I’m mostly shocked by the lack of detailed information related to the entire cost of the project and the adjusted sales price.
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Restaurant Profit and Loss Statement – Best Format to Use
A well organized and understandable restaurant profit and loss statement can provide infinite value to a restaurant owner. The best format to use allows the owner to understand his prime costs, total variable costs and the required contribution number necessary to cover fixed costs and desired profit.
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Format of the Profit and Loss Statement for Service Related Businesses
Service related businesses require a different format than the traditional profit and loss statement AKA the income statement. The traditional profit and loss focuses on sales of products and a corresponding cost of goods sold section to help the reader evaluate the gross margin. But in service, the owner needs a profit and loss statement…
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How Much is a Fair Profit? Part I of V – Owner Compensation
A fair profit for a small business is between 9% and 37%.
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How to Calculate the Best Markup for a Construction Project
Every construction project has costs beyond the direct costs and the contractor wants to earn a profit. To cover these costs he must have an appropriate markup. The contractor must give consideration to many variables and circumstances to calculate the best markup for a construction project. To determine the best markup percentage on costs, the contractor…
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What is a Reasonable Profit in Construction?
For any company, profit is based on the risk reward concept. With construction, what should be the profit (reward) given the risk? What is a reasonable expectation given the industry and the particular business? There is no single correct answer. The construction industry is divided into several significant branches. This article is focused on the residential contractor. From…
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What is Amortization?
Non-physical assets are expensed to the income statement or profit and loss statement via a method called amortization. It is most commonly used in the mortgage industry to refer to the monthly payment made to pay interest and the principal (the amortizable portion) on a debt instrument.
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Accounting Principles
Simply stated, accounting is the measurement of economic activity. Its primary principle is to report information to the user so that (s)he can make informed decisions. The primary reporting format is in the form of dollars. There are two important reports used by pretty much 99% of all business operations to determine the status of the business…