How Do You Work Out Profit And Loss?


1 Answers

Stephy Profile
Stephy answered
First thing you need to do when working out profit and loss is:
Just follow these steps:

Sales minus sales returns gives you your net sales/ turnover

stock at start
purchases minus purchase returns gives you your net purchases

add your net purchases with your carriage inwards and that gives you your total cost of goods available for sale

total cost of goods available for sale minus the stock at end gives you cost of goods sold

net sales/ turnover minus cost of goods sold gives you your gross profit

discounts received plus commission received add the total of that with the gross profit to get your total income

add all running cost and expenses e.g. Advertising, wages for staff rates etc to get your total expenses.

Deduct depreciation , add all the amounts like equipment and furniture together to get the total depreciation
minus the net profit before depreciation with the total depreciation to get the net profit.

And there you go! That how you work out the profit and loss statement.

Answer Question