How to explain a Profit & Loss
During a Thanksgiving chat with family and friends, how would you explain the P&L of a company you are interested in? You do want to impress your uncle, who works as a banker at Goldman Sachs, but don’t want to bore the other people sitting at the table.
To explain it, try to split the P&L into the 3 main segments: sales, cost of sales, and expenses. The difference is Net Income. Use the % of sales ratios in your discussion.
See the short video on how to read a P&L here: