Cost of Sales

Cost of sales is the all encompassing term used to reflect the section of the profit and loss statement identifying the actual costs against sales. There are several other names used including 1) Cost of Goods Sold, 2) Costs of Construction, 3) Cost of Services Rendered or Provided and Cost of Manufacturing.

Bookkeeping – Estimating Employee Benefits (Lesson 84)

Estimating Employee Benefits

Employee benefits consist of vacation, sick time, retirement benefits, healthcare and other de minimis benefits.  As a function of accrual accounting these benefits are estimated and posted as a deferred liability in the accrued payroll section of the current liabilities section of the balance sheet.  This lesson explains how to calculate the respective benefits and post this information to the books.

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P&L Statement – Best Format for Salons

P&L Statement - Best Format for Salons

An owner of a hair salon needs a well organized and properly formatted profit and loss statement (income statement) to properly evaluate performance.   There are multiple presentation formats used in the service industry, but after 25 years of accounting I advocate for the functional presentation arrangement.   This form of a profit and loss statement allows the owner to quickly and decisively determine performance throughout the entire operation.

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Gross Profit Margin

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 tax return as the amount earned after cost of sales a.k.a cost of goods sold, cost of services rendered, etc. is subtracted from sales (revenue).

Inventory Turnover Rate

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 number possible.  This higher value means the business operation is selling the product as fast as possible.  This in turn signifies that the business is getting the best return on its financial investment into inventory.

Business Dynamics of Hauling

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 is the primary business principle .  Lack of efficiency drives up fuel costs, loss of time in hauling; increased maintenance and repairs, and finally customer dissatisfaction.  This article is an introduction to this industry as a part of the transportation sector of our economy.

This content is for Bronze, Silver, One-Time and Contractor's Diagnostic members only.
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