Profit and Loss

A standard financial statement also known as the income statement, statement of financial position, or revenues in excess of expenses.

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.

Apartment Complex Profit and Loss Statement – (Revenue Section) Best Presentation Format

In the apartment complex industry I have had the privilege of reviewing four different presentation formats prepared by different Certified Public Accounting Firms.  Interestingly enough, they were all distinctly different.  But one stood out!  It made much more sense than the others.  One of the other three had an interesting subsection and so I combined the best attributes of both. 

Cost Drivers in Small Business

Cost Drivers in Business

The textbook answer defines cost drivers as those factors that determine the overall cost of operations.  As an example, in manufacturing the cost drivers may be processing time or number of steps to produce the product.  In service, the cost drivers could be the actual ratio of billable to non-billable time.

Profit

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 before income taxes are paid.  However, this is not correct.

Format of the Profit and Loss Statement for Service Related Businesses

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 formatted to key in on overall productivity and costs of that productivity.

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