Simple Profit & Loss Statement

How to use the sheet

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the simple profit and loss statement and
how to use it
a profit and loss statement is a tool
used widely in businesses to establish
how the business is doing any business
says certain products any business
income certain costs the profit-loss
statement simply tells you whether your
business is profitable that is whether
it is making a profit or whether your
business is making the loss
it is important to understand this -
because this tool can definitely help
you in rectifying whatever else they
might be in your business or it can at
least warn you about where your business
is headed this tool is used life
businesses of aiding scales and meeting
sizes the profit-loss statement is a
mandatory requirement by the governments
or various countries and is used to file
for taxes at the end of the year
the simple property loss statement in a
snap short
oh how the business is doing it is
divided into various parts the first
part the revenue for the money that your
company is making that we are selling
products
if you have one product of fiber perhaps
you are selling and therefore the sales
number will be defective
accordingly your company might make
other income
let's see you have made a profit in one
year and you've invested this profit in
some government security that diamond
security gives you seven or eight
percent interest that is income for you
at his income for your company and
therefore that income protected and
other income sculpture
the total revenue about company for a
month which could be january-february or
march is a total sales
the company has made in that period and
any other money has come into the
company for that particular time with
you since you're selling something
it also including the cost there are two
types of course a direct costs and the
office expenses for the indirect test
the data cost is simply the cost of the
product the cost of the product is the
price at which you're buying this
product from your supply into the number
of products that you pick normal active
life therefore let's see you sell apples
you sell apples at five apiece to vegas
customers
however your supplier is mr. key you
purchase apples from mr. P at trapeze
what happened Philippe's is a cost of
your product if you put you as a hundred
apples from mr. K at three rupees your
cost is three entities for data cost is
only the first appreciating the product
we also supply office expenses if you
just call the cost of selling and other
expenses sheet we had kept an entire
section which was one in expenses in
good to run the business
these are just obscene expenses so
incurred expenses and advertising
marketing maintenance of equal of this
range travel expenses and other such
heads
these are office expenses automatic
expenses and a total of these will be
the total total kinetic lost
there's something called the gross
profit and the operating profit the
gross profit is simply the money that
you make after you subtract the total
revenue and total data costs so
therefore if you sell apples for 5
rupees for Apple but you purchase them
from history a trapeze purple and gross
profit for one Apple is five of these -
3:00 please
student please this gross profit number
which should be just that after you
reduce the office expenses or after you
subtract the office expenses from the
glass profit you arrive at an operating
profit the operating profit is primarily
how much money are you including to run
a business where you sell lets the
apples
so if you sell a hundred apples at fibre
beings as 500 rupees as revenue if you
approach is
hundred apples from history a trapeze u
infinitive beans as costs and let's see
the cost of you running your office is a
hundred rupees per month so you have
series of 500 rupees
- cost of purchasing the apples at the
energies to cross cross profit should be
200 rupees - the office expenses of a
hundred peace
therefore the operating profit is a
hundred rupees
let's start filling up the sheet and I'm
sure the computer to you
the years 2011 and then India so we're
putting rupees
let's say we make sales or 100,000
rupees in the month of january we have
no other income
let's say the cost of the products that
we are selling is 16,000 apiece
therefore a gross profit is 40 telling
the piece that's a hundred Teletubbies
- 60,000 bees is cross profit since
you're an office it would obviously be
going expenditure on office rent a good
maintenance patrol expenses advertising
and marketing expenses for the sale of
your product and stopping the numbers
out here and you will see what your
operating properties
as you can see your operating profit is
15,000 rupees
this is because you have taken the
following you've taken your total
revenue subtracted the cost of the
product getting a grasshopper forty
thousand rupees
so forty thousand rupees is what is left
to you for running for office of this
for details in the piece you have spent
twenty five thousand rupees in that
month there for your operating profit is
15,000 rupees
you will continue doing this for all the
months of the year and you will see
which you arrive at an operating profit
15,000 rupees or whatever the number
might be after you start inputting
numbers out to the profit-loss statement
is an important part because you get to
know immediately whether your company is
making a profit on making a loss and it
is always better to make a profit
that's a simple rule of business and
it's important that you have a positive
or operating profit does not become
negative if this is negative
it basically means that you are spending
out of your own personal resources which
is not a wise thing to do
we have three sheets or one or do and
your three the on similar to see the
reduced remember when you are trying to
prepare a proper and loss statement for
your company
this is it is always wise to consent
which our accountant at our accountant
will tell you all the right things that
need to be done to input into the sheet
he will also maintain your books of
accounts for you because at the end of
the year when you have to find it a
chance
it's actually extremely important an
accountant to those sheets and sure that
whatever you entered is correct
the government will always ask you to
find your income taxes ops ii it as a
company of the other individual
hence it is important to maintain a good
book of accounts and it's important that
your property loss statement reflects
what is accurate
that's correct your business