“The typical accounting package lists expenses in alphabetical order. From Advertising, to Auto Expenses, then Bank Charges, and so on. Lines and lines of separate expense items, all detailed to the penny. How useful is that? Is this designed to inform? Or, to confuse and confound? No wonder few retailers will spend much ‘quality time’ with their financial statements. But, there IS a simple trick that will let you make sense of all that data. At The ROI, we call it The PROFIT Finder.”
“Simply re-organize the individual expenses on your P&L into 5 ‘buckets’ of expenses. Then calculate each bucket, or category, by its percent of total sales.”
Click the image to access a Retail Owners Institute slideshow on this topic.