Net profit is a target to be achieved by the firm it is not enough to generate only sales or to control only expenses if a company cannot earn net profit. If sales are less then expenses it means that company has made a loss. And if company has cut the expenses to control them but if it has resulted in decreasing of sales then there is no benefit of cutting the expenses.
As there are two areas sales and expenses which results in profit therefore you are responsible for the area which comes under your authority. For example if I am a marketing manager I am responsible for sales or if I am a production manager am responsible for costs of production.
It is not correct that a banks profit Is not fixed it may be calculated for a particular period regardless of different loans and different interest rates because you know that what amount is going to be received in a particular period therefore we know what would be the profit in a particular period . Like other business in which the provision for doubtful debts against accounts receivable Is to be kept, the same thing applies to banking industry where you have to keep provision for Bad Loans .
If you have any further query feel free to ask .
if you like the answer accept it and leave a positive feed back and in future for you accounting problems address them directly to me by adding "For Haider" before the question .
Sorry, but Part 1 does not answer my question.
If someone is responsible for an entire business, what is the answer? If I own the profit and loss (revenue and expense) how do I answer the question of how large is my P & L?
If you are a sole owner of the business then all the profits earned by the business are yours and if any losses are made then its your sole responisibilty to pay them even from your personal assets .For example you have an investment of 500,000 and have made a loss of 2,000,000 you are responsible to pay them even from your personal assets.
if you are satisified now so accept the answer so i can get paid for my efforts ..
I'm sorry but you are not answering my question. It is a VERY common question asked by companies that are hiring an executive.
How large was the P & L you were managing at your last job?
I do not need a P&L explained to me. ANd I dont need examples with arbitrary numbers that dont actually answer the question.
When a company asks you how large was the P&L you were managing, what number are they referring to?
Is it Revenue? Expenses? Net Profit? Some combination?
Please assign this to another "expert" as it is clear you do not know the answer. You are obviously inteligent, but my question is a simple one for anyone who has worked in finance for a bank or major corporation.