January 08, 2013

Kaley's Knits: The Profit And Loss Statement

Yesterday, we saw that top-line demand is growing, nicely.  Life is good, right?

I like to see at least four years of financial results, three years at minimum.  We get an opportunity to see just how healthy a business is.  A table, such as the table illustrated below, should be part of Analytics 101 training and Executive Management 101 training.
Oh, no.

Demand increased from $17.8 to $20.1 million over the past four years.

Earnings Before Taxes decreased, from $2.2 million four years ago to $1.5 million today.

In other words, this business is struggling, struggling badly, right?

Here's your homework assignment for today - which lines in the profit and loss statement illustrate why this business is struggling to produce profit?

The Math Behind Bifurcated Customers Who Have "Moved On" From Catalogs

Yesterday we talked about a classic, outstanding catalog customer ... and how that customer needed MORE mailings on an annual basis. ...