I just helped a transportation company with this problem. They increased sales by $1,000,000 in 2018, a 20% increase over 2017, but ended the year with the same net income as the prior year. This meant they worked harder and took more capital risk but didn’t get a return on their sweat or capital. I analyzed their income statement and found that their gross margin percentage (gross profit / sales) had decreased from the prior year. This meant that their costs of providing ser

In Part I of this three-part series, I defined some terms used in this article (click here). By the end of this article, you’ll know how to tell if the products or services you’re selling are profitable or if you’re losing money on them. You can then take action on the troublemakers to increase your bottom line. If you’re an owner or manager, this kind of analysis is critical to your success. If you suffer from arithmophobia (a real word meaning fear of numbers or arithmetic)