Small Business Tips : How to Figure Profit & Loss

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Temat: Biznes

Hello, I'm Mike Mitchell and today I'd like to tell you how to figure a profit and loss

in a business. Profit and loss is pretty easy. It's a basic economic concept in almost any

business. And really it's just a way to find out how much money you're earning and how

much money you're spending. Basically profit is your plus, and loss is your minus. Okay.

In most economic or financial software programs, these profit and loss statements will be generated

automatically after you enter all of your income and expenses for each month. For your

income, generally, this is all of the money; using the US dollar sign just an example;

that comes in at any given month. This is from receivables, maybe interest or any other

reason why you would have money coming in from a company. For your expenses, this is

everything that you spend the money on throughout the month. Some of the big ones would be maybe

rent or the salaries for your employees and almost anything else that you can think of

that a business would have expenses for; postage, insurance and basically whatever you have

to write a check for and the money that goes out. Then, for your profit and loss statement

at the end, all of positive amounts will be positive numbers and the negative amounts

will either have a minus or they sometimes are denoted by having the number in parenthesis

and at the very end you'll have basically your total at the bottom. And hopefully, if

you've done your business well, this will be a profit and it will show the number in

a positive number. And at the end of each month, you'll have a profit and loss statement.

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