*Reason One The first reason for writing a business plan is to formally decide what the company is doing, where it is going and how it will get there – kind of a “focusing the mind” exercise. Reason Two The second reason, which is possibly the primary reason why people call in accountants and business [read more]
Investment, Tax and Extraordinary Items*Investment Income The various types of investment income can be broken down into three main headings: Income from shares Income from other fixed assets (for example, property) Interest If there are any losses or interest payable, these are then deducted (but they are shown separately on the face of the Profit and Loss Account as opposed to being hidden [read more] |
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Distribution and Administrative Expenses*Distribution Costs As the name suggest, this is the cost of transporting your product to your customers Administrative Expenses This includes expenditure on head office premises, administrative staff and overheads. Apportionments It is frequently impossible to categorise an item of expenditure as purely distribution or purely administrative. When this is the case (for any item, [read more] |
Gross Profit or Loss*Turnover In the Profit and Loss Account, turnover is the income you generate through your sales. (Investment income, which will be the subject of a future blog, is dealt with elsewhere) Cost of Sales This is basically all the direct expenditure incurred in generating your sales. Therefore, the cost of stock and raw materials will [read more] |
Profit and Loss*The Profit and Loss account is probably the financial statement that gets the most attention. At it’s simplest, it is merely a statement of income less expenditure – which hopefully still leaves a positive figure. If you are a plc (public limited company, who’s shares are traded on the stock exchange), the Companies Act lays [read more] |
