How to Explain: The P&L

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Ever wish your clients could understand their P&L so you didn't have to explain EVERYTHING to them?
Sure, we all do.
But figuring out how to explain it to them in terms they can understand can be challenging.
👉 In this episode, I'm going to show you how I explain the P&L to our CFO clients.
My hope is that this gives you some ideas or inspiration as to how you might break it down.
Enjoy!
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WHO AM I?
I'm Michael King. A nuclear engineer turned Fractional CFO. I've spent nearly a decade scaling my Fractional CFO firm, KFE Solutions. During that time, I've realized the enormous impact that Fractional CFOs can have for their clients, their families, and themselves.
Now, I help other Fractional CFOs learn how to scale their firms and maximize their own impact!
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[@Unnamed111-l5z]

You have explained rather complex question in such a simple way! Thank you!

[@1_baddest476]

Educative. Simple to the point

[@josemateuslopes8241]

From now on I'll follow you. Very amazing. Thank you

[@TheCFOreport]

Happy to help!

[@kelrassi]

Great explanation and clear P&L

[@lunamorris2091]

I like your video presentation. It is informative too, at the same time. Thanks a lot for your guidance!

[@TheCFOreport]

Thanks! I'm glad it was helpful 😀

[@podjlbs]

Great video, one of the better ones out there- than you !

[@TheCFOreport]

Wow, thanks!

[@funmasti29]

Good video with no waste of time. ❤

[@TheCFOreport]

Thanks! Glad you enjoyed it.

[@ValeHow-de5ts]

Fab explanation, many thanks

[@TheCFOreport]

@@ValeHow-de5ts glad it was helpful!

[@captkhalsa]

Great explanation!

[@TheCFOreport]

Thank you!

[@chuckturner997]

Can you show a P&L and do a demo? Industrial field?

[@rikkihurt]

Hi Michael, I’m an Executive Assistant and hope to be hired on to one of the positions I’m interviewing for.
One supports the CFO, the other supports the VP of tax department. Part of the role I really want is analyzing the P&L statement and other reports and recommending a course of action.
Any advice for me that will help me wow my executive and help me excel in my role?

[@Jaktgbabu]

Thanks well informed ❤

[@shankarp.s5923]

excellent...

[@FortuneGodstar]

Amazing! 👏

[@chocolatte8301]

Thank you!

[@TheCFOreport]

You’re so welcome!

[@burlyn88]

Perhaps dumb question here...but I always assumed Profit was after ALL expenses. How do I know what other sorts of things fall under the COGS category vs Overhead?

[@TheCFOreport]

COGS are the expenses directly related to making your product or delivering your service.
Example:
Let’s say you sell dry erase markers. Your COGS would include the marker shell, the felt inside the marker, the lid, the box, etc.
Let’s say all of your COGS total up to $1.25. You sell your marker for $2 then your gross profit is $0.75.
Example 2:
If you sell plumbing services, your COS would include the payroll your company paid the plumber that works for your company. So if you pay them $30/hr and they spend 3 hours at the job your COS would be $90.
Let’s say you bill $100. Your revenue for that job would be $300. Your COS is $90 and therefore your gross profit is $210.
These are two very basic examples but I hope it helps!

[@patrickjarman372]

Nice Video.

[@TheCFOreport]

Thanks Patrick

[@SoyYoAlessandro]

How to invest the money of my P&L on Webull?

[@prathameshARE]

❤❤❤

[@TheCFOreport]

@@prathameshARE ❤️❤️❤️

[@aartug1]

What about EBIT and other terms used in P & L?

[@TheCFOreport]

There's definitely more to the P&L. But concepts like EBIT or EBITDA aren't concepts that I have found most business owners need to understand to make smarter decisions around their financials.
Important for a fractional CFO, a CPA, or a bookkeeper to understand - less important for day to day understanding of the financial health of a business.

[@MrRivii]

Thank You!