Profit_and_Loss_of_Kudler_Fine_Foods

| Profit and Loss of Kudler Fine Foods Crystal Jenkins BSA/310 Business Systems 04/25/2012 Donn Leiske, M.Ed. The purpose of this paper is to describe the most recent profit and loss statement for Kudler Fine Foods. “Kudler Fine Foods is a local upscale specialty food store located in the San Diego metropolitan area” ("Kudler Fine Foods", 2011), that sales bakery and pastry products, fresh produce, fresh meat & seafood, condiments and packaged foods, and cheese and specialty dairy products. According to their income statement, the business did pretty well for a company that only has three locations in San Diego. This paper will first describe the profit of the company, and last it will describe the loss of the company. First, Kudler Fine Foods did well with their gross sale which was $10,804,000. The gross profit which is “the difference between sales (operating) revenue and cost of the goods sold during the period” (Raiborn, 2010, "Chapter 2: Concepts and Elements Underlying Accounting"). Kudler had a gross profit of $2,321,369, which is pretty good especially when their third shop was just opened the same year as the income statement. “The difference between gross profit and a company’s operating expenses is operating income, also called income from operations. This amount is an important one because a company’s eventual success or failure hinges on the profitability of its principal line, or lines, of business” (Raiborn, 2010, "Chapter 2: Concepts and Elements Underlying Accounting"). Kudler had a net operating income of $668, 950. Net income is the “income before income taxes” which “is determined by adding (or subtracting) the net amount of other revenues and expenses to (or from) operating income. Subtracting income tax expense from income before income taxes provides the net income (or net loss) for the period” (Raiborn, 2010, "Chapter 2: Concepts and Elements Underlying Accounting"). They also had an interest on income which came out to $7,845. After all the expenses that Kudler had their net income was $676,795.00, which means that they made a profit rather than suffered a loss. Furthermore, although Kudler made a profit they had a loss of profit due to all the expenses that they had to deduct from their net income. Kudler had to take into thought about how much the their beginning inventory, which the cost of it was $467,890. They also had to add in how much their cost of their purchases, freight-in, direct labor, and indirect expenses were. The total of all those costs was $8,903,921, but they also had to subtract their ending inventory of $429,090, so their cost of their goods sold ended up being $8,474,831. There were other expenses that Kudler had which made their net income lower. Every company needs to advertise their company otherwise no one would know that they existed. Kudler spent $263,000 in advertising for the company. For amortization, bad debts, bank charges, charitable contributions, bonuses, and systems & network contract they had to pay $439,258. Companies have to pay for credit card fees to be able to use credit cards there, the fees they had to pay was $125. Kudler had more expenses to pay for which included HR payroll outsource, depreciation, dues and subscriptions, insurance, maintenace contract, miscellaneous things, office expenses, and operating supplies which came out to $260,921. There were also expenses for software licenses, permits and licenses, postage, professional fees, repairs, telephone, travel, and vehicle expenses which came out to $90,608. In order for a company to work out they would need a place to work out of and have utilities as well, Kudler had to pay $70,900 for an office lease and utilities. For a company to also work out they would need employees to work for them to make things got sold and manage right, so Kudler paid their employees a total of $725,650. All together Kudler’s total for expenses came out to $1,652,419. In conclusion, Kudler had different types of expenses to deduct from their net income. Although, their expenses was not as much as how much the cost of their goods was. I do not know much about business, but selling $10,804,000 and only coming out with a profit of $676,795, does not sound like they are doing very well. The costs of their goods seem a little expensive. I know that they sell fine foods and all, but it seems like they should charge a little more for their products and give incentives for people that shop their often. References: Kudler Fine Foods. (2011). Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler2/internet/index.asp Raiborn, C. A. (2010). Core Concepts of Accounting (2nd ed.). Retrieved from The University of Phoenix eBook Collection database.