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Lab

Income Statement Builder

An income statement turns a year of business into a stack of subtractions. Pick a business, then change one input at a time. Before each change, say which line you expect to move first.

Challenges

  1. Raise the price by 10% without changing anything else. Which margins move, and which one moves the most?
  2. Double the marketing budget. Why does the gross profit margin not change at all?
  3. Find the smallest number of units the coffee shop can sell and still show a net profit.
  4. Raise the direct cost per unit until the gross profit margin falls below 50%. What would you tell the owner to look at first?

Topics this lab supports