Tag Archives: annual report

Do You Understand the Income Statement – aka P&L?

I have found that many startup founders and even some executives in larger technology companies are not familiar with the structure of the income statement, also known as profit & loss statement, or short P&L. 

Why the P&L is Actually Quite Interesting

Every one who works on business model design or who is in a leadership role at a technology company should understand a few basic concepts about the P&L, because

  • the P&L provides information on the cost structure of a business 
  • this helps you understand your own business, that of competitors (in case you have competitors that need to report their financials), and that of industry leaders who use a similar business model as you do (for inspiration)
  • the cost structure is very much intertwined with the business model of a company
  • and therefore, it helps you understand which freedoms you have (and don’t have) in evolving or changing your business model

Continue reading

Please use the buttons below to activate connection to social media sites. To ensure your data privacy, links to social media are disabled initially.