- Original Poster
- #1
Hey,
Just looking for a bit of assistance with calculating our 2008 profit.
We use SAGE but it was setup very poorly for us, which is making it almost impossible to calculate our 2008 profit due to issues with cost of sales etc... and many more bugs, which technically are beyond me explaining.
Anyway without going into detail i would just like your views on whether this is a reliable way of calculating our profit. I have looked at various company accounts, and the following things seem to be used to calculate profit:
1) Fixed Assets - we know the value of our fixed assets at the end of 2007, and at the close of 2008.
2) Current Assets
i) We know out closing 2007 stock value, and our closing 2008 stock value.
ii) We know our 2007 closing debtors, and our 2008 closing debtors.
iii) We know our cash in bank at the close of 2007, and at the close of 2008.
3) Creditors - We know the amount owed to creditors at the end of 2007, and the amount owed at the end of 2008.
Based on knowing all the above, is it possible to calculate our 2008 profit? To me it seems so, as i can't see what else affects it - surely all this cost of sales is irrelevant if we know the above figures?
For example:
1) Our assets increased by £10,000 from their closing level in 2007.
2) Our stock increased by £10,000 from its closing level in 2007.
3) Our debtors increased by £10,000 from their closing level in 2007.
4) Our cash in bank increased by £10,000 from its closing level in 2007.
This gives a net gain in 'total assets' as such of £40,000.
5) Our creditors increased by £10,000 giving a further liability of £10,000 above what it was at the close of 2007.
Assets (£40,000) less liabilities (£10,000) = £30,000 profit/shareholders funds?
Does this seem right to people or is my basic understanding of how profit is calculated flawed?
We have an accountant but they simply work on the fgures we give. I simply want to know based on the above figures if we really did make approx. £30,000 profit in 2008?
Any input is appreciated, as it's doing my head in!
Just looking for a bit of assistance with calculating our 2008 profit.
We use SAGE but it was setup very poorly for us, which is making it almost impossible to calculate our 2008 profit due to issues with cost of sales etc... and many more bugs, which technically are beyond me explaining.
Anyway without going into detail i would just like your views on whether this is a reliable way of calculating our profit. I have looked at various company accounts, and the following things seem to be used to calculate profit:
1) Fixed Assets - we know the value of our fixed assets at the end of 2007, and at the close of 2008.
2) Current Assets
i) We know out closing 2007 stock value, and our closing 2008 stock value.
ii) We know our 2007 closing debtors, and our 2008 closing debtors.
iii) We know our cash in bank at the close of 2007, and at the close of 2008.
3) Creditors - We know the amount owed to creditors at the end of 2007, and the amount owed at the end of 2008.
Based on knowing all the above, is it possible to calculate our 2008 profit? To me it seems so, as i can't see what else affects it - surely all this cost of sales is irrelevant if we know the above figures?
For example:
1) Our assets increased by £10,000 from their closing level in 2007.
2) Our stock increased by £10,000 from its closing level in 2007.
3) Our debtors increased by £10,000 from their closing level in 2007.
4) Our cash in bank increased by £10,000 from its closing level in 2007.
This gives a net gain in 'total assets' as such of £40,000.
5) Our creditors increased by £10,000 giving a further liability of £10,000 above what it was at the close of 2007.
Assets (£40,000) less liabilities (£10,000) = £30,000 profit/shareholders funds?
Does this seem right to people or is my basic understanding of how profit is calculated flawed?
We have an accountant but they simply work on the fgures we give. I simply want to know based on the above figures if we really did make approx. £30,000 profit in 2008?
Any input is appreciated, as it's doing my head in!
