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How to Calculate Your Profitability: A Case Study

CFO Simplified

As Iowa State University reminds us, “profitability is the primary goal of all business ventures.”. Business leadership is often responsible for measuring current, past, and future profitability. But what is profitability? This CFO Simplified client watched profitability slowly disappear—until they incurred a $125,000 loss.

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How do I clean up my financial statements?

CFO Share

Do your profits and cash flows make no sense? Too many general ledger (GL) accounts. Unsophisticated GL structures. Most small businesses do not know the ins and outs of cost accounting, meaning they leave costs down in operating expenses (or have no costs at all, so gross profit = sales.)