The Definitive Guide to Business Finance: What smart managers do with the numbers, Second Edition

Looking forward

In Chapter 10 you forecast your sales. In this chapter you have calculated your product costs and looked at ways of valuing your inventory. Subtract these costs from sales to arrive at gross profit. It is this straightforward. Figure 13.5 shows a simple calculation, while Fig. 13.6 has a more complex example. The next chapter looks more deeply at controlling and analysing costs, while Chapter 23 considers the relationships between inventory, costs, and revenue.

Fig 13.5. Simple arithmetic in a spreadsheet

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Fig 13.6. Playing the numbers game (2)

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‘This year, we are asking you to reduce ...