How to Read a Profit and Loss statement

Written By Madison Spear

So many business owners pay attention to one thing - the bottom line. It’s arguable other figures carry the same weight.

As you run through your report, here are the figures I would suggest paying attention to -

  1. COGS / Gross Revenue - how much of your revenue is being eaten up by the direct cost of what you sell?

  2. Payroll / Gross Revenue - how much of your revenue is going towards paying people?

  3. Expenses (excluding COGS and payroll) / Gross Revenue - how much does it cost to run your business outside of production and labor?

  4. And yes…the bottom line - what is your net profit margin?

These things will empower you to make wise decisions. Start here.

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Madison Spear
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