Lesson 4: The Income Statement and Direct Cost

Gross Profit is on the minds of every owner and plant manager! Every little improvement can mean jumping ahead of the competition with more reinvestment dollars to make the business stronger!

 

You probably think the income statement starts with the top-line, sales.  But think again.  You can give stuff away, sell a bunch, and drive a company into bankruptcy. That’s why I love Gross Profit so much!  Is the firm making money or not? It’s all about Gross Profit. Gross Profit feeds the rest of the income statement. Low Gross Profit? Lots of luck covering that cost of capital and keeping shareholders/owners happy. Your main contribution to any manufacturer lies inside the plant and therefore Gross Profit. You can literally save that next plant from being “on the bubble” by helping drive Direct Costs lower.  Do you have any idea how important you are to the customer? You will begin to internalize your value as you better understand the importance of Gross Profit and how you can positively impact it!

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Lesson 3: Cracking the Treasure Chest

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Lesson 5: The Income Statement and Indirect Costs