Knowing how to read your P&L helps you understand whether your day-to-day operations are truly profitable. By breaking out fixed and variable costs, you can calculate your gross margin and make more informed business decisions.

Your Profit & Loss and Balance Sheet work together to tell the full financial story of your business. When you understand how these reports connect, you can make informed decisions about profitability, growth, and long-term stability.

In this edition, we break down Variable Costs, Fixed Costs, Cost of Goods Sold, and Overhead costs. Understanding the differences between these costs helps you see where your money is going and how it impacts your profitability.