Access FP&A Income statement analysis Course: https://ebitda.thinkific.com/pages/start

A very common mistake when analyzing income statement is to look at the variances vs previous period of target, and make assumptions of the performance based on the variances alone. This is a risky way of analyzing the income statement. This is because you have not analyzed the results thoroughly enough to understand the impact of price vs volume and mix impact. This can lead to incorrect conclusions and explaining the income statement performance incorrectly. This is why I highly recommend that you perform the price, volume, mix and cost analysis first and then proceed with making conclusions or statements on income statement performance.

If you are a financial analyst, or a business analyst, this skill is a MUST HAVE. But its not as easy as it sounds sometimes. Specially understanding the difference between volume and mix, and how price impact is calculated vs quantity (volume and mix). In the end, all the variances should add up to the difference or variance you are seeing in the income statement. A good way is to prepare a bridge or a walk for Net sales, gross profit and EBITDA, both for amount change and also for % change. This is exactly what I cover in the course in detail with examples and downloadable excel file with calculation of all the variances, bridges and waterfall charts.

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Course Alert:
If you would like to learn in detail, how to calculate sales and profit variances and the impact they have on sales $, profit $ and profit margin %, and how to explain performance vs budget and prior periods, click on the link for a detailed video course (at a special price). You will also learn how to analyze and present the results of the variances to management and will be able to download solved variance calculation Excel templates. https://ebitda.thinkific.com/courses/learn



Videos you may like:
Learn sales and profitability analysis in detail here: https://youtu.be/CNx1Xu3DWVY
Gross profit and gross profit margin explained: https://youtu.be/Px4pEhiTRdI
How calculate selling price and profits on Etsy: https://youtu.be/WsrdSr_IIhM
Standard Margin and Actual Margin - the Difference: https://youtu.be/p-Vbqh_j-ZY
How calculate selling price and profits on Etsy: https://youtu.be/WsrdSr_IIhM

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Hope you find the information in the video helpful. If you like to watch more videos in accounting, financial analysis and controller ship, videos that help you directly in doing your job, subscribe to my channel. If you liked the video, I would love if you could LIKE it and leave a comment. If you have any questions or feedback, again leave a comment. Lets stay connected at #learnaccountingfinance.