Profit And Loss And Balance Sheets Page 2

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SIMPLE FINANCIAL
CALCULATIONS
For every single bit of goods or services you
.
Your books tell you what's happened
supply to others, there will be costs to pay
in the past.
(money going out) and money coming in
from the sales you make. If there’s more
.
Your cash flow forecast is about what
coming in than going out, then you should
may
happen in the future.
be making a profit. Let’s look at working
.
What about now?
How are we doing
that out:
right now?
Sales
.
Wouldn't it be nice to know if you
This includes everything you’ve supplied,
were making a profit?
even if not paid for yet! It is your usual
trade. It does
not
include sale of assets.
If you supply goods, you need to know how
much stock you’ve purchased, and how
much stock is left. (In a service trade, you
won’t.) This is known as the
’cost of sales’.
Cost of sales is:
Value of stock at start of time period
+
Value of stock bought in this period
=
Total stock available to be sold
-
Value of stock left at end of period
=
Cost of sales for the time period
P 214

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