Management accounting | Numbers Knowhow https://numbersknowhow.co.uk/category/management-accounting/ Cash flow and financial planning made easy Thu, 21 Mar 2024 13:48:53 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.1 https://numbersknowhow.co.uk/wp-content/uploads/2022/02/cropped-Favicon-Cog.png Management accounting | Numbers Knowhow https://numbersknowhow.co.uk/category/management-accounting/ 32 32 Financial Statements Explained https://numbersknowhow.co.uk/financial-statements-explained/ Sat, 22 Jul 2023 10:26:39 +0000 https://numbersknowhow.co.uk/?p=11565   Financial statements explained is the topic of this blog (and vlog). And it will serve as a guide to you so that you can better understand them.  Why do you need to know about financial statements? Because the financial statements form the bedrock of any company. Therefore, understanding them and how they work gives you insight and clarity. In this video, I’ll walk you through: What each statement is, The content of those statements, Why it’s important to understand these documents. Financial statements explained There are 3 types of financial statements, and they are: 1. The cash statement It summarises where the cash in your business comes from, and where it goes. 2. The profit statement Also called the P&L, or profit/loss statement. It shows you your company’s profit and loss over a given period of time. 3. The balance sheet It’s a financial statement of the assets and liabilities of a business at one particular point in time. Benefits Undoubtedly, these documents give you, as a business owner, the numbers of the company and show you: how your business is performing financially, and where you stand in terms of your cash flow. Certainly, this can be overwhelming for […]

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]]> Gross Profit & Your Business https://numbersknowhow.co.uk/gross-profit-and-your-business/ Mon, 17 Apr 2023 07:19:17 +0000 https://numbersknowhow.co.uk/?p=11597   Knowing your gross profit is one of the most important steps to understanding the health of your business. Gross profit is the amount of money a company makes after subtracting the cost of goods sold from total revenue.  In this blog, we are going to look at what gross profit means for your business. Your business journey map must have profit as a destination point. When you set your numbers dial to profit, you’ll be looking at gross and net profit. In the world of numbers, gross does not mean unpleasant or disgusting – though making a rubbish gross profit is not good. What does gross profit mean for your business? Firstly, let us take a closer look at what we are talking about. And the best way to go about it is to illustrate using an example.  So, let’s imagine that Govan sells second-hand trainers online at £100 per pair. Now, if he sells twenty of those, he makes £2,000 in sales. Congrats to Govan, but that’s not his profit. He needs to buy and clean those trainers before selling them. The costs are £40 a pair. This means that Govan makes £60 profit for each pair he […]

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