Understanding Your Profit and Loss

3 hour workshop


Understanding the P&L is a vital skill for business owners and managers. It shows quite simply whether your business is making a profit or a loss and gives the details on how the the revenues are being achieved and where the costs are being incurred.

Regular review of the profit and loss guides the business owner/manager on the trends of their business and allows them to compare current activities with the budget or last year. The informed manager will be able to identify where there is good news for the company and where there may be trouble ahead.

The profit and loss report shows turnover, cost of sales, overheads expenses and finally profit or loss. The business manager can see how much that turnover costs the business by looking at the cost of sales. They can also see how much just being in business is costing them through the overheads expenses.  This knowledge provides the manager with the tools to make informed business decisions and the ability to measure the consequences of those decisions.

This course can be taken on its own or as one in a group of three hour courses that includes the Key Concepts in Finance, Understanding Working Capital, Understanding the Balance Sheet and Understanding Cash Flow

Key Content

  • Turnover, costs of sales and overheads
  • Fixed and variable costs and what these mean to the profitability of the business
  • Direct and indirect costs
  • Sales mix and the implications on profit
  • Identifying and using key performance indicators
  • Understand the limitations of the P&L
  • Using the P&L to forecast future business activity


The course is designed for business owners and managers who have no formal financial training but want to understand clearly how to read a profit and loss statement

This session will help managers to look at their profit and loss and understand what the information is telling them

Course Objectives

Course delegates will be able to:

  • Understand how the profit and loss statement can help them to run their business
  • Understand about the nature of fixed and variable costs and the implications for profitability
  • Understand and calculate basic ratios
  • Using variance analysis to control the business

Course Requirements

Delegates on this course do not require any qualifications or accounting knowledge. It would help the delegates understanding if they have some involvement with finances and financial information.

Contact Details

Contact Bridget on bridget@bh-financial-tuition.co.uk or 07795 463 202

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