{"id":509,"date":"2024-04-17T16:00:11","date_gmt":"2024-04-17T16:00:11","guid":{"rendered":"https:\/\/wp.megabits.com.au\/verifiedbusiness\/?page_id=509"},"modified":"2024-06-12T02:10:21","modified_gmt":"2024-06-12T02:10:21","slug":"pl-and-balance-sheet","status":"publish","type":"page","link":"https:\/\/wp.megabits.com.au\/verifiedbusiness\/for-buyers\/pl-and-balance-sheet\/","title":{"rendered":"P&#038;L And Balance sheet"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-page\" data-elementor-id=\"509\" class=\"elementor elementor-509\">\n\t\t\t\t<div data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-element elementor-element-1662fe6 e-con-full e-flex e-con e-parent\" data-id=\"1662fe6\" data-element_type=\"container\">\n\t\t<div data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-element elementor-element-4f9651c e-con-full e-flex e-con e-child\" data-id=\"4f9651c\" data-element_type=\"container\">\n\t\t<div data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-element elementor-element-32da4db0 e-flex e-con-boxed e-con e-child\" data-id=\"32da4db0\" data-element_type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a34fac9 elementor-widget__width-initial elementor-widget elementor-widget-heading\" data-id=\"a34fac9\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.22.0 - 16-06-2024 *\/\n.elementor-heading-title{padding:0;margin:0;line-height:1}.elementor-widget-heading .elementor-heading-title[class*=elementor-size-]>a{color:inherit;font-size:inherit;line-height:inherit}.elementor-widget-heading .elementor-heading-title.elementor-size-small{font-size:15px}.elementor-widget-heading .elementor-heading-title.elementor-size-medium{font-size:19px}.elementor-widget-heading .elementor-heading-title.elementor-size-large{font-size:29px}.elementor-widget-heading .elementor-heading-title.elementor-size-xl{font-size:39px}.elementor-widget-heading .elementor-heading-title.elementor-size-xxl{font-size:59px}<\/style><h2 class=\"elementor-heading-title elementor-size-default\"><a href=\"https:\/\/wp.megabits.com.au\/verifiedbusiness\/for-buyers\/\">BACK<\/a><\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-587b23e9 elementor-widget__width-inherit elementor-widget elementor-widget-heading\" data-id=\"587b23e9\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">P&amp;L AND BALANCE SHEETS<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-element elementor-element-4b6674ba e-con-full e-flex e-con e-child\" data-id=\"4b6674ba\" data-element_type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-653d23e4 elementor-widget elementor-widget-text-editor\" data-id=\"653d23e4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.22.0 - 16-06-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Profit &amp; Loss (P&amp;L) and Balance Sheet Explanation<br \/><br \/>The main purpose of any business, (and some would say the only purpose), is to make a profit. If a business doesn&#8217;t make a profit, it is just a question of time before it goes down. All businesses sell something, either a product or a service and if the amount of sales they make doesn&#8217;t exceed the costs involved in producing and selling the product or providing the service, the business is in trouble.<br \/><br \/>The combination of the Profit and Loss (P&amp;L) statement together with the Balance Sheet is what tells you the actual financial performance.<br \/><br \/>A business can have plenty of customers but still be going broke and until you see the Profit &amp; Loss statement you just don&#8217;t know.<br \/><br \/>The Balance Sheet is the second part of the performance indicator and shows where the Net Profit has actually \u2018gone&#8217; at any time. It is a \u2018snapshot&#8217; of the full, financial position of a business at a specific particular day or time.<br \/><br \/>A Balance Sheet can be confusing, but shouldn&#8217;t be, and is sometimes used to \u2018hide&#8217; certain expenses of the business to make the profit picture look better. Look out for expenses such as \u2018Repairs &amp; Maintenance&#8217; which may be shown as Assets in the Balance Sheet but are really expenses that should be in the P&amp;L.<br \/><br \/>This means the Net Profit figure in the P&amp;L will be wrong and is not a true record of the company&#8217;s profitability.<br \/><br \/>There are three main components of a Balance Sheet: Assets, Liabilities and Owner&#8217;s Equity.<\/p><ul><li>Assets are tangible items that a business owns, such as plant &amp; equipment. (P&amp;E)<\/li><li>Liabilities are what the business owes, such as a loan from a bank.<\/li><li>Owner&#8217;s equity is the remainder and is what the owner&#8217;s investment in the business is worth.<\/li><\/ul><p>When assessing a business, always insist on seeing figures produced by the owner&#8217;s accountant, to help ensure the integrity of the P &amp; L and the Balance sheet.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-element elementor-element-4283d5d e-con-full e-flex e-con e-child\" data-id=\"4283d5d\" data-element_type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>BACK P&amp;L AND BALANCE SHEETS Profit &amp; Loss (P&amp;L) and Balance Sheet Explanation The main purpose of any business, (and some would say the only purpose), is to make a profit. If a business doesn&#8217;t make a profit, it is just a question of time before it goes down. All businesses sell something, either a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":88,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"elementor_header_footer","meta":{"footnotes":""},"class_list":["post-509","page","type-page","status-publish","hentry","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>P&amp;L And Balance sheet - Verified Business<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wp.megabits.com.au\/verifiedbusiness\/for-buyers\/pl-and-balance-sheet\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"P&amp;L And Balance sheet - Verified Business\" \/>\n<meta property=\"og:description\" content=\"BACK P&amp;L AND BALANCE SHEETS Profit &amp; Loss (P&amp;L) and Balance Sheet Explanation The main purpose of any business, (and some would say the only purpose), is to make a profit. 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