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Author: aoeuid One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308519  
Subject: Re: Bankrupt or try to 'gut it out'? Date: 11/4/2012 10:09 AM
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Someone wrote:

P&L = profit and loss statement. A simple accounting of what comes in vs. what is expended on the business.

In some businesses (not mine, and probably not cleaning as someone noted above) you can make a fabulous gross income. But the expenses eat it all up so you earn little at the end of the day, or even take a loss. That's not a business, it's a hobby.

^^^^^^^^^^^^^^^^^Dean says, I see. Good point. Here is a bad P and L from my personal experience. I buy a brand new book (lets call it book A) from Amazon. It cost 20 bucks. A year or two later, I see I have no cash. So, I start selling used books used via Amazon. I take book A that I bought brand new from Amazon and list it for sale on Amazon.

Book A is listed for 10 bucks. I sell it. By the time I package it and ship it, my overall 'profit' will be 5 bucks. So, the needed cash is nice, but that sure is in the LONG RUN, an unsustainable business model.

A brief recap. I bought the book new for 20 bucks. I sold it later for ten bucks. It takes me five bucks to handle and ship it, netting me a whooping five bucks. DUMB. The only good thing it did was de-clutter my personal library a bit, and put a 'few pennies' in my pocket.

Thank you for the P and L lesson.

Sincerely,

Dean
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