 QuickBooks Online 2022 Comparative Profit and Loss P&L or Income Statement. Get ready because it's go time with QuickBooks Online 2022. Online in our browser searching for QuickBooks Online Test Drive going into the Test Drive. We're going to be picking up the United States version of it and verifying that we're not a robot. Sample Company, Craig's Design and Landscaping Services holding control, scrolling up just a bit to get to that one to five percent. We're also going to have the free 30 day trial version open so we can look at the business view and compare it to the accounting view. If you don't have access to this at this time, that's okay. We're going to use it more in the second half of the course. Going back on over to the sample file, we're going to be opening up a few tabs up top. Going to the tab up top to do so, right clicking on it and duplicating the tab. We're going to go to the first tab again, right click on it again and duplicate the tab again. As that is thinking, I'm going to jump back on over to the 30 day trial version just so we can look at this business view to see where the reports are located and they're located in the business overview area and then the reports right here. If you were to go and change the cog up top or go into the cog to change to the accounting view, you will have a view that will be similar to what we're working with in the sample file. Back to the sample file. We now have the refreshed tab. We're in the second tab now. We're going to make that into our standard income statement or profit and loss to start out with. Let's go down to the reports and just note that some comparative reports may automatically be given to you and QuickBooks might have already put them together. But we're going to learn how to construct them so that you have a lot more flexibility with the types of reports you might be looking at. So let's just take a quick look at the reports down here in the business overview. You've got your balance sheet reports and then you've got your profit and loss report. This is as a percentage of income, which is kind of like a vertical analysis that we'll put together in a future presentation profit and loss comparison. And I would think this is probably going to be a comparison to the prior year. This will be similar to what we're constructing now. But if you know how to construct it, then you've got a lot more flexibility with the types of comparisons that you can put together. You got the profit and loss detail, the profit and loss year to date comparison, and then the profit and loss by customer profit and loss by month and the profit and loss by tag group and then the standard P and L. So let's open up the profit and loss and see how we can use some of the functionality to make some of these comparative type of reports. It'll be similar to what we did with the balance sheet, but with the profit and loss, remember that we have a different format of the type of report. It's not as of a point in time. It's a range of time. Let's set that range now by going to the date range up top and saying this is going to go from 01, 0121 to 12, 3121. Run it and then we'll go to the tab to the right. We'll also open up the balance sheet too so that we have our major two financial statement reports opened up. Let's just open that up from the favorites and close up the hamburger scrolling up and then range changing it from 01, 0121 to 12, 3121. And run that report. So remember the balance sheet that we looked at in the prior section as of a point in time. The income statement here is going to be a timeframe, a range of time. So if we wanted to do some kind of comparative types of reports, there's a couple ways we can do it. One is we could select just having the range up top that's being the entire year and then select some other type of formatting. In other words, we might say I want to use it and show it quarterly. And so that would break out the quarters. If we run it running this report got to run it. There's no data in the first quarter or the second quarter. And then you got the third and fourth quarter that has data within it. Also note that as we do that, it does give us a total because what it's giving us here saying, hey, this is what your performance was. And you can think about that analogy of basically starting the odometer over in a car and seeing how far you can drive in a month, for example, or in this case, in a quarter. And then it just keeps on going up for that quarter. So we're going to add the full quarters together. And then we got the total, which is basically how far you drove in a year. And then we start the odometer over for the next year. That's different. I'll recall that if I go to the balance sheet over here and I was to break this out by quarter. So let's break this out by quarter, run it. And we don't get the total column over here because on the balance sheet side of things, it's as of a point in time. It's not accumulating upwards. It's just it is what it is as of that point. Going back to the prior tab, we can also do that if we change the range up top and say, let's say we want to do a comparison of just two months. November and November, November and December. So I'll change the range from 11, 0, 1, 2, 11, 0, 1, 2, 1 to 12, 31, 2, 1. And then I'm going to change it from quarters to months, two months and run it, running it. And here is our comparison. Again, we got a it's a really nice comparison to do this way on the income statement because you can compare multiple different months, not just two months and you get not only the periods that are covering, but you also get the total at the right hand side. So you get to see the total that's being accumulated for the timeframe you're looking at and the two months, the two months broken out as well to see how well you did in this format. We're going to have the prior month on the left hand side. So we're reading in essence from left to right in kind of chronological order the last month is first and then the current months are later. And then you get the total. However, you might want to see this comparison to say I would like to see the difference between the two instead of adding the two up to try to look at the comparison between one month and another. So to do that report, we're going to scroll back up top and say I'm going to bring this back to the totals. Let's bring it back to the starting point back to the totals run it. So now I would have the totals for the two month time period, which would be equal to the total column in the prior report that we looked at. And then I'm going to use the prior period thing. So if I hit the drop down, I need this prior period thing. That means I want to first set my time range for the current period, which is just going to be December, and then compare it to the prior period. So I'm going to say let's do this as of 12.01.21. That's the current period, and then I'm going to compare it to the previous period. And so it'll give us a custom range down below and note it's picking the entire month up, which is good. Also note it can be a little bit confusing when you use this tool because you're comparing a custom period in our case that is 31 days, which happens to be the whole month of December to a custom period, which is only 30 days, which is the month of November. We can also of course do an easily formulated previous year and a year to date type of analysis down below. So we're just going to do the month by month calculation. And well, let's do this first. Let's do this first and just see the comparison. So now you don't see the total column over here. But and also you have the current month is first. And this is a very common way to see a comparative type of report because on the last report we saw it in chronological order. Now we're seeing it basically in order of importance. The most current period being the most important period for my decision making standpoint and then the prior period. Instead of having the total, I want to see the difference now. So I'm going to go back up top and say, give me the difference in dollars. Poor favore run it running it. And so now we've of course got the current period minus the prior period gives us the change in dollars. That can give us a good idea of how well we are doing by looking at these changes and then trying to make decisions based on that into the future. There are substantial changes from period to period and we are a company that's basically in a consistent period of time. Then we would want to be able to explain those changes to ourselves and or to management so that we can we can justify the changes that have been made. They should have a reason for them. And so let's go back up now the changes are good and that could be quite good for internal kind of reporting purposes. Even for internal reporting and especially for reporting to someone else external or comparing or benchmarking to some other company. You need the percentages. We got to have the percentages. So let's go back up top and say let's do this again and hit the drop down and say we want the percentage change and run it. So this would be like our horizontal analysis type of report. Let's pull out a trustee calculator and do a little bit of calculation with it. And we're going to say let's make this there is still a big calculator. I tried to make it small. I'll keep it there though. And we're going to say this is going to be for example the design income one two seven five minus the nine seven five. That's going to be the three hundred and then that's the change. We take the change divided by the prior period to see the percent increase. I'm going to take that change divided by the nine seven five. That's our increase. I could multiply it times a hundred to get to that thirty point seven seven amount. And this is the type of analysis you'll see commonly in job performance and things like that. Obviously if you look at job performance of athletes for example people at bats how many at bats does someone have. We can't really measure how many times someone got on base for example because if you have two different headers and they get up to bat different amounts of time. Then it's not really fair for to have major one person that got like way more at bats than the other person. So that's so what we need are the percentages. So you're going to use these kind of percentages all the time anytime you're measuring performance and it could be outside of financial performance. It could be any kind of performance type of thing and you're trying to see what happened in comparison one thing basically to another thing. So it's very common horizontal type of analysis in this instance of course we might be benchmarking ourselves and comparing ourselves to other companies that are in our particular industry. And they might have a bigger dollar amounts most likely they would because we're trying to copy them and we want bigger dollar amounts. So so we can't compare the dollar amount changes we can compare possibly the percent changes. And we could start to say OK what's the industry standard is the industry going up. Is this a good period for my particular industry or not do my percent increases align with what's changing in the overall market and so on. So if we did a couple more of these we can of course do this one this will be the labor 250 minus the 50 that's going to be the 200 divided by the prior period which was the 50 in this case. And we got the four times times 100 and you get the 400 that's going to be a big change obviously. So also note that when you look at these ratios it's only one kind of thing that you're looking at. So it's one angle that you're looking at something. And just remember a lot of people don't like ratios because you know they don't really they may not have as much experience with working with ratios and ratios are just like anything else. It's just like words words. You can use one fact to mislead someone and then you know you can pile a bunch of lies on top of one fact and mislead people with words. We're pretty good at catching that kind of thing. So we can say hey wait a second you said one true thing and then you just piled a bunch of lies on top of it. And we get pretty good at catching that. But with statistics you know the same thing can happen. You can use one statistic that and totally distort the statistic. The statistic is still one piece of truth or at least you know that it is what it is. And then you put and then you pile a bunch of lies on top of it. So we start to just trust the statistics but it's not really the statistics fault. It's just one angle to look at it. And obviously we need to be looking at things from multiple different angles. So obviously if you had a situation like this where there was nothing in the prior period and you had something in the current period. Well there was a hundred percent you know decrease in this particular area. Well then you got to take into consideration the fact that the prior period was zero and so on. And look at and look at that particular scenario in that instance. So what you want to do with these kind of with these with these ratios is try to see where the big differences are. You're probably looking for those big differences and saying OK if there's a difference over a certain percentage I'm going to look into it. Like this percentage I'm going to look into that one and say you know why is that there. And then explain it and say can I explain is there a rationale is there a reason for this. Or is there something that I got to do or is there something I got to change. If I see this one hundred percent change I could say OK I know a reason for I could see that you know that doesn't look as extreme as it otherwise would. Given it's only a fifty dollar charge and it was you know there was nothing in the prior period. So I could probably explain that pretty easily if I was to you know spend some time to look in on it. So just a couple things to to note there. Let's do our standard kind of formatting now going back up top and say we can do some customization of this report. So we're going to customize it and I'm going to say let's get rid of the sense is our standard custom will make the negative numbers bracketed and we'll show them as red and then I'm going to scroll down to the header and the footer. And let's say let's say let's call this not a profit and loss. I'm going to just change the name to practice the fact that we can do so. And I'm going to call it a comparative income statement. Let's say income state income statement and then it's been our custom to remove the footer stuff the stuff on the foot. I want to clean foot clean foot and then we're going to say there we no date no time no report basis run it. And so now we've got this nice red the red numbers are popping out for us here. So those might be where we're going to put the emphasis on and it looks pretty pretty snazzy snazzy. As some people say not many people anymore. I think that was an old that's like an older term maybe I kind of like it. I'm bringing it back. It's snazzy. I'm going to go back into my periods up top here and I think I want this custom period of 1111 to 1130. Let's run that just make sure I got so there it is. So I think I had my the period was looking a little bit different there. So now let's pull out the trustee calculator again and just calculate some of these items again. Ultra vase ultra vase. Can I make this smaller? And so for example the income now to so let's just take this line item just for example 3 3 2 7 minus the 847 gives us the difference to 2480 difference divided by the previous period 3 3 2 7 gives us hold on a second. We got the 3 3 2 7 minus the 847 gives us the 2480 divided by the prior period the 847 gives us the 2.92 times 100 gives us that 292% about to 293 about. Once we have formatted like in prior presentations we want to save the customization and then we'll take a look at the sending options with an email printing it exporting it to a PDF we'll take a look at those options in future presentations.