Businesses often misinterpret the concept of PROFIT or EARNINGS. The fact that your company does not have any debt to the market, has money in the safe or bank, or has stock in its warehouse does not mean that it is making a profit.
Whether you are a service, trade or production business does not change your perspective. The correct calculation of Operating Profit requires having a similar perspective. Regardless of the business you do, operating profit should be calculated based on your activity and related expenses.
Your Service Production - Commercial Goods - Raw Material costs related to your main activity should be tracked and recorded correctly and operating expenses should also be followed. Your company may have started to make a loss without you realizing it or may have been making a loss for a long time. In order to detect this situation, you need to follow your company with OPERATING PROFIT reports.
The data we have mentioned such as cash, stock and debt-free status do not mean that you are making a PROFIT. Your assets may continue to melt over time. If your reporting system is not structured in accordance with this logic, it will be difficult for you to realize the situation.
While the OPERATING PROFIT reports will be very useful for your company in the short term, another title that you should follow periodically is the BALANCE SHEET (YES - NO). With the Yes - No Analysis Reports, you will have the opportunity to see the real financial and fiscal status of your company.
The most important contribution to business continuity will be the interpretation and monitoring of your company's activity results with correct reporting - analysis techniques.