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PART VII — ACCOUNTING🟢 Beginner

How Do You Read a Company's Profit and Loss Report?

Income Statement (Profit & Loss)

Revenue minus all costs equals net profit — the income statement tells you whether the farm made money over a period.

accountingP&LprofitrevenueCOGSEBIT

Live Result

$104,000

ƒ: revenue - cogs - operating_expensesraw: 104000

ƒ(x)

Use variable names from the panel above (e.g. FV, r, n) — or type numbers directly: 10000 / (1 + 0.08)^10

revenue

Total corn and soybean sales ($)

revenue = 200000

cogs

Seeds, fertilizer, direct harvest labor ($)

cogs = 54000

operating_expenses

Fuel, repairs, depreciation, land rent ($)

operating_expenses = 42000

interest

Interest on USDA loan ($)

interest = 2500

taxes

Federal + state income taxes ($)

taxes = 25375

💡 You can also enter values directly in the formula: 10000 / (1 + 0.08)^10

⬇ Export Calculation

Exports a plain .txt file with your expression, formula, all variable values, result, and educational notes — ready to paste into any report, Word doc, Notion, or Google Docs.

The exported file includes the formula in standard mathematical notation — you can paste it directly into Excel, Google Sheets, or back into FinanceSheep.

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Learn: Income Statement (Profit & Loss)

PART VII — ACCOUNTING · Educational Guide

The Core Idea

At the end of harvest, Jake asks: Did I make money? The income statement — also called the Profit & Loss or P&L — answers this by listing every dollar earned and spent over the season. Unlike the balance sheet (a snapshot), the income statement is a movie: it covers a period of time.

How It Works

Revenue − COGS = Gross Profit → − Operating Expenses = EBIT → − Interest − Taxes = Net Profit. Each layer strips away a different category of cost. Gross margin measures production efficiency. Operating margin measures business efficiency. Net margin is the bottom line — what the owner actually keeps.

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Real-World Example: Jake sold 30,000 bu corn @ $6.00 + $20,000 soybeans = $200,000 revenue. COGS (seeds $14,000 + fertilizer $22,000 + harvest labor $18,000) = $54,000. Gross Profit = $146,000 (73% margin). Operating expenses (fuel $12,000 + irrigation $8,000 + depreciation $10,000 + land rent $12,000) = $42,000. EBIT = $104,000. Interest $2,500 + taxes $25,375 = Net Profit $76,125.

How Do You Read a Company's Profit and Loss Report?

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