02-17-2007, 05:16 PM
The typical format of a Profit and Loss Account is -
Turnover / Sales
Cost of Sales
Other Direct Expenses
Subtotal
Gross Profit
Other Income
Subtotal
Overhead Expenses (including Depreciation)
Subtotal
Net Profit
Other Direct Expenses would typically include the wages of people making raw materials into finished goods, or packing materials.
Other Income would typically include Interest Earned on money on deposit.
Overhead Expenses are those expenses which tend not to vary directly with the level of sales. They include Rent, which will only vary with the level of sales, if sales increase to an extent that larger premises are required.
Accounts which we prepare normally show each of the expenses as a percentage of sales. This helps to identify trends in the figures from year to year.
Turnover / Sales
Cost of Sales
Other Direct Expenses
Subtotal
Gross Profit
Other Income
Subtotal
Overhead Expenses (including Depreciation)
Subtotal
Net Profit
Other Direct Expenses would typically include the wages of people making raw materials into finished goods, or packing materials.
Other Income would typically include Interest Earned on money on deposit.
Overhead Expenses are those expenses which tend not to vary directly with the level of sales. They include Rent, which will only vary with the level of sales, if sales increase to an extent that larger premises are required.
Accounts which we prepare normally show each of the expenses as a percentage of sales. This helps to identify trends in the figures from year to year.
