Explore the key concepts that contribute to a healthy bottom line in a company. Learn to benchmark a triple bottom line: profitability, people, and planet.
- Sometimes it feels like companies are only focused…on making a profit.…It's not hard to feel this way…when you're stuck on the phone trying…to reach a customer service department…or at home trying to sort out a huge bill.…This belief isn't entirely wrong.…There's a school of thought that pervades business…that companies should only focus on profit…and maximize return for their shareholders.…If they do this, the argument goes,…everyone from employees to society at large benefits.…A bankrupt company, after all, doesn't really help anyone.…Now, shareholder value is generally created…by growing top line revenue…and maintaining a healthy bottom line.…
That healthy bottom line is created…when total revenue is more than total expenses.…A reasonably healthy profit number is 15%.…For example, if your gross revenue's a million dollars,…your expenses are at 850,000,…you're looking at $150,000 in profit.…That's a healthy bottom line.…But this shareholder value model has many critics.…In order to make a profit, companies need to pull in revenue…
- Explain how understanding your company’s finances will help you as an employee.
- Identify how you can help drive revenue if you do not work in sales.
- List the key things to look for when setting terms with suppliers.
- State why it is important to understand key accounting concepts and success measures.
- Explain what an income statement can tell you.