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Presentation Of P/L
Presentation Of P/L
Every business needs to keep accurate records of their income and expenditures. It’s what helps you plan for the future, create budgets, keep costs down and maintain a good-looking profit margin. One crucial record is the profit and loss (P&L) statement.
You’ll have to decide upon a time period you want to cover initially, and then using a spreadsheet, create columns for Sales Revenue, Cost of Sales, Overheads and Sales and Marketing Costs.
Structure of the Profit and Loss Statement
A company’s statement of profit and loss is portrayed over a period of time, typically a month, quarter, or fiscal year.
The main categories that can be found on the P&L include:
- Revenue (or Sales)
- Cost of Goods Sold (or Cost of Sales)
- Selling, General & Administrative (SG&A) Expenses
- Marketing and Advertising
- Technology/Research & Development
- Interest Expense
- Taxes
- Net Income
How to Analyze a Profit and Loss Statement (P&L)
One of the main jobs of a professional financial analyst is to analyze the P&L of a company in order to make recommendations about the financial strength of the company, attractiveness of investing in it, or acquiring the entire business.
Examples of P&L statement analysis include:
- Comparing year-over-year numbers (horizontal analysis) as well as industry benchmarking
- Looking at margins: gross profit margin, EBITDA margin, operating margin, net profit margin
- Trend analysis: are metrics improving or deteriorating
- Rates of return: Return on Equity (ROE), Return on Assets (ROA)
- Valuation metrics: EV/EBITDA, P/E ratio, Price to Book, etc
In E-TAX HUB INDIA, We are having a Financial Experts who can bring you the Strength and weakness of your Company by analysing the P/L statement which Helps you to grow your Business to next Level.
