How Do You Figure Profit And Loss?
When you operate a business, you have money coming in from sales. This money is your gross profit or revenue. As you operate your business, you also have money going out for expenses. Your expenses are divided up into direct expenses and indirect expenses that include overhead. The direct expenses include things like materials, products purchased for resale, feed, and salaries to employees, as well as other employment related expenses. The indirect expenses include your building rent or depreciation, electricity, heat, office expenses, machine and equipment depreciation. You will need the totals of these numbers to calculate your profit and loss for a given period. Decide on the reporting period for which you desire to calculate a profit and loss. If the reporting period is one month, three months, or a year only add the income for those actual days. Income comes from producing goods, rendering services, other business activities, and the disposition of assets added together. Add up al
