Finance and management

There are three lines on every financial statement that are critical for you to understand about your organization whether you run a lemonade stand or a County government:
Income, Expense, and Profit/loss. 

The first one we all think about is profit/loss, also known as the bottom line.
This tells you how much if anything was left over after the bills (and you) are paid.
Rule of the Bottom Line: Keep it moving above zero. 

Going up, the next line is the expense line.
This tells you where your money went, but it takes discipline to manage this for sustained growth.
Rule of the Expense Line: You can’t save your way to success but you can spend your way to failure. 

The top line is all the money you took in.
This tells you how much you can spend on the things you need.
Rule of the Top Line: Grow it or die.

<IMHO> Fred Jacobsen


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: