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Home > Careers & Employment > Marketing & Sales > 10 points for best answer.net profit has decreased when the annual turnover and sales have increased?

10 points for best answer.net profit has decreased when the annual turnover and sales have increased?

Category: Marketing & Sales

PomiPomi


My business net profit has gone down as costs and turnover have risen over the two years. It has decreased massively from 100,000 to a measly £40,000 and it is strange given the increase in turnover and the small rise in costs.

what can be the reason for the net profit going down when the annual turnover and sales have increased?

thank you.

Cala
Cala

If turnover has increased and the sales have increased but the profit has decreased then your overheads have increased somewhere. Either you are paying more for the original product/service and therefore your profit margin has gone down, or your running costs have increased. That's assuming that your books are correct.

Steve B
Steve B

As your accountant to explain where the money has gone. If he won't (or can't), you need a new accountant :-)

PS you might want to consider doing evening classes in bookkeeping === if you don't know where the money is going, I bet other people know this (and just maybe they have their hands in the till).

Finance is like learning to drive == do it yourself or get taken for a ride ...


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