From the course: Developing Business Acumen
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Understand profit and loss
- One of the most common terms you'll hear people using around the office is P&L. That stands for Profit and Loss Statement. It's a financial statement that tells you how much money you're making or losing. It's a standard accounting approach for looking at the financial performance of your organization. It has some very common elements to it. At the top of your P&L, you should see your revenues, and that may be broken down in terms of the volume of product or service you're delivering, the price you're offering it at, and any discounts you've given. That's referred to as the top line. Next, you'll see your costs, your direct costs. These will be cost of goods sold. You may see it reflected as COGS, C-O-G-S. That's the cost of all the inputs that go into delivering your product or service. The line below that is typically gross profit. This is just the profit of, I sold one unit of product, I had this much expense, and I made this much money on that unit of product. Below gross profit…
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