Income Statement Controls + Dig Here
Trends Income Statement Controls + Dig Here
The summarized income statement and the detailed income statement have some extra features at the top of the page that give you even better optics on your business. The first feature lets you view your income statement in one of three different modes. Each mode gives you a different perspective on your business.
By default, the income statement shows your financial information as Monetary Amounts where each cell in the table is a “dollar” amount, just like the financial statements your accountant sends you.
CFO Scoreboard also gives you the ability to view your income statements in common size. Common sizing your income statement means converting every monetary amount to a percentage of total revenue. If sales are $1 million and cost of goods sold (COGS) is $750,000, your COGS is 75% of revenue. If rent is $25,000, then rent would represent 2.5% of revenue. Knowing that a specific expense has gone up or down by a specific monetary amount is useful, but seeing the expense represented as a percentage of revenue is critical to seeing the magnitude of escalation in relation to total revenue.
The third option that is provided allows you to view your income statements in “per unit” mode. In “per unit” mode, each number on your income statement is divided by the number of units your business sold that month. When you look at your revenues and expenses on a per unit basis, you can easily see if it is costing you more or less per unit to sell and service your customers.
The second feature unique to the income statement is the Dig Here feature. Dig Here helps you see which expense items have increased the most on a common size basis and what the savings would be if the business had been able to prevent that common size percentage increase. These savings are displayed in a special Dig Here column on the far right of the table.
The Dig Here feature has two settings. Setting the display to Dig Here Savings for Month versus Month compares the common size value of the most recent month to the prior month. It shows you which expenses have grown a disproportionate amount this month.
Changing the setting to display Dig Here Savings for Year versus Year compares the common size value of the current year to date to the previous year. It shows you a more macro view highlighting the expenses that have been growing disproportionately fast over the entire year.