I cover the second half of my strategy for conducting a year-end financial analysis that I use for all of my businesses.

1. Episode 78
• This is a continuation of the
information covered in Episode 77.
• It gets right into the costs of goods
sold section of the Profit & Loss
Statement.
Business Coaching Inquiries: (844) 884-8264 | titaniumsuccess.com
ConductAYear-End
BusinessFinancialAnalysis
Part 2

2. vVP&L - Cost of Goods Sold
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• Rent, utilities, and equipment investments
do NOT go under cost of goods sold.
• Only direct costs go under this section.
• This includes anything that goes into
producing your products or services.
• Your cost of goods sold will rise as your
sales volume rises.
• Looking at this section makes you look at
gross profit.
• This is the money you make before you
pay overhead.

3. vVP&L - Expenses/Overhead
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• All expenses not directly related
to producing goods fall under
“overhead”.
• Rent, utilities, and payroll all
fall in this section.
• Too much overhead is what kills
a lot of companies.

4. vVLooking at the P&L as a Whole
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• When looking at the total revenue
section, you’re asking:
• What line items are making the most
money?
• What’s trending up or down?
• When looking at the cost of goods sold,
you’re asking:
• Where am I spending the most
money?
• What are my margins like on each
line item?
• When looking at overhead, you’re
asking:
• How much am I spending to keep
this business alive?
• Where can I make cuts?

5. vV
Using the P&L to Plan for Next Year
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• Most people only plan from their
bottom line.
• If they made $200,000 last year,
• They want to make $300,000 this
year.
• This type of planning is useless.
• It’s better to plan from the
performance of the line items in
your P&L statement.
• This allows you to see the path
towards your revenue goals.

6. vVThe Balance Sheet
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• Your balance sheet shows you what you
have spent money on.
• It also shows you who owes you
money.
• Accounts receivable in the balance sheet
section is what people owe you.
• Accounts payable is what you owe
other people.
• Keeping your balance sheet balanced
comes down to knowing where the cash
goes.
• The balance sheet is important when
looking at big-picture decisions.

7. vVStatement of Cash Flows
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• The statement of cash flows
shows how much money
came in,
• As well as how much money
went out.

8. vVPutting Everything Together
Business Coaching Inquiries: (844) 884-8264 | titaniumsuccess.com
• Understanding how each section
relates to the other is crucial.
• Look at the P&L statement,
balance sheet, and statement of
cash flows each month.
• Make critical decisions for the
future based on this analysis.
• Schedule a session with a
business coach to help with your
year-end financial analysis.

9. BUSINESS DOWN
TO A SCIENCE
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