Librons

[Librons @Librons2158571]

@manzigiovanni_ Was waiting for him to smash it

[Librons @Librons2158571]

@Fredphilip96527 This is nostalgia now …

[Librons @Librons2158571]

@WAVArchive Coming from school, throwing away the bag, turning on the PC and you have the remaining part ….

[Librons @Librons2158571]

@Tareq3bdelslam Poster of this born 1999. Feel you bro

[Librons @Librons2158571]

You're a good soldier, choosing your battles
Pick yourself up and dust yourself off, get back in the saddle ….

[Librons @Librons2158571]

@EddyWinxxx Absolutely Everybody:

”Me every morning”

[Librons @Librons2158571]

@skyfall_177 Not accurately represented. Salary is given from the total revenue and nothing is given to employees once the comany reach to the profit (salaries and other costs leads to profit and not the other way around)

[Librons @Librons2158571]

@shubhvanii Which is the fault of average and above average men giving them more attention than they deserve

[Librons @Librons2158571]

@adxtyahq Is 300 Series Ai AMD RYZEN Ai-350 50 TOPS NPU processor good? 24GB RAM

[FinancialKnowledge @FinancialK82290]

Financial insight 1:

”I am making 6 figures”. I guess you hear statements like that on a regular basis. What does it actually mean?

The most important point to highlight here is: It’s not money into the pocket that suddenly comes into the bank account. Most likely, the money are incoming under the umbrella of a company (whether it’s small or big business). Therefore, it’s important to understand how the cash and money flows within a company and what actually lead to profit.

To make it simple now: each company has 3 essential financial statements.

1. Income statement (stating what happened in terms of sales and spendings, usually during one year)

2. Balance sheet (stating the financial position of a company - Assets, Equity and Liabilities)

3. Cash flow statement (how much cash coming into the bank account minus cash out). Remember for now, this is not the profit!

Those 3 statements are to be broken down in the upcoming posts! 💸📊

[FinancialKnowledge @FinancialK82290]

Financial insight 2:

As mentioned in the previous post - every company has 3 essential financial statements. Learn how to read those, you understand how the cash is flowing and how much money the company is actually making! 💰💸

Let’s start with the income statement (profit or loss statement):

Simply here you see how much sales the company has made during a given financial period (usually a year). It’s called revenues which is usually stated at the top of this statement.

Note that the revenue is only the money earned of the sales, not considering any expenses yet! Don’t be foolish and think this is what the owner is making. There are alot of expenses that takes that figure down!

Stay tuned for the next financial insight 📈 to go through other items of the income statement

[FinancialKnowledge @FinancialK82290]

Financial Insight 3:

What is Cost of Sales? (The real cost of making/selling what you actually sold)

Most people look at revenue (top line) and think "that's how much money the company made." Nah — that's just how much came in from customers.

The very next line on the income statement usually hits you with **Cost of Sales** (also called Cost of Goods Sold or COGS in many places). This is the direct cost tied to the stuff or services you actually sold during the period. Subtract it from revenue → you get **Gross Profit** (the money left after covering what it cost to deliver those sales).

Key point: Cost of Sales is NOT all your expenses. It's only the costs that go up or down directly with what you sell. Everything else (marketing, rent, salaries of non-production staff, etc.) comes later.

What usually goes into Cost of Sales?
- **Direct materials** — raw stuff or inventory you buy to make/build the product (e.g., fabric for clothes, steel for cars, ingredients for food).
- **Direct labor** — wages of people physically making or assembling the product (factory workers, chefs, assemblers — not the CEO or sales team).
- **Manufacturing overhead** that's directly tied — things like factory electricity, machine depreciation, production supervisors (but only the portion related to making goods).
- For retailers/wholesalers: Mostly just the **purchase cost** of the inventory you sold.
- For service businesses: Often called "cost of services" — things like subcontractor fees, materials used on client projects, or direct project labor.

**Quick note**: In many companies (especially ones that sell both products + services like Ford or tech firms), they use "Cost of Sales" or "Cost of Revenue" as a broader term that covers both goods and services. But the idea is the same — direct costs of what's sold.

### How is Cost of Sales calculated? (The classic formula)
For businesses with inventory (manufacturers, retailers, etc.):

**Cost of Sales = Beginning Inventory + Purchases (or Cost of Goods Manufactured) − Ending Inventory**

Why subtract ending inventory? Because you only expense the portion you actually sold. Whatever is still sitting in the warehouse at the end of the period stays on the balance sheet as an asset (inventory), not yet an expense.

**Simple example**
You run a phone case shop:
- Start of month: 100 cases in stock @ $4 each = $400 beginning inventory
- During month: Buy 300 more cases @ $4 each = $1,200 purchases
- End of month: 150 cases left in stock @ $4 each = $600 ending inventory

Cost of Sales = $400 + $1,200 − $600 = **$1,000**
(You sold 250 cases worth $1,000 in cost — even if you sold them for $2,500 revenue → Gross Profit = $1,500)

**Important flow (especially if you hold inventory):**
- When you buy/make products → costs go to **Inventory** on the balance sheet first (asset, not expense yet).
- Only when the product is **sold** → that cost moves from Inventory to **Cost of Sales** on the income statement (now it’s an expense).

### Why should you care?
- High Cost of Sales % (compared to revenue) = low **gross margin** → less room to cover operating expenses and actually make profit.
- Track it over time — if Cost of Sales is creeping up as % of sales, maybe suppliers raised prices, waste increased, or you're discounting too hard.
- Investors love strong gross margins — it shows pricing power and efficiency in production/sourcing.

Next up? Probably operating expenses / SG&A or gross profit deep dive — lmk what you want for #4 bro 🚀

Drop a like/RT if this helped simplify it, and tag someone who needs to see this.

#FinancialInsight #CostOfSales #IncomeStatementDecoded

[FinancialKnowledge @FinancialK82290]

Financial insight 4:

SG&A expenses (Selling, General & Administrative). It’s usually the third line on the income statement. These are the operating costs that aren’t directly tied to making the product/service (unlike Cost of Sales from Insight 3). They come right after Gross Profit on the income statement. These expenses include below:

Part 1: Depreciation on PPE (Property, Plant & Equipment)
Depreciation spreads the cost of big long-term assets over their useful life — it’s a non-cash expense.

- Think buildings, machines, vehicles, computers, furniture.
- You buy a $100k machine that lasts 10 years → each year you record ~$10k as depreciation expense (straight-line method).
- Why it matters: It lowers reported profit even though no cash leaves the company that year. It matches the “using up” of the asset to the periods it helps generate revenue.
- Watch for: Rising depreciation can signal heavy recent investments (good if growth follows) or old assets needing replacement soon.

Part 2 & 3 to be broken down in seperate insights!

#IncomeStatement
#OperatingExpenses
#FinancialInsights
#Depreciation
#PPE
#NonCashExpense

[FinancialKnowledge @FinancialK82290]

Financial Insight 5:

SG&A part 2: Payroll Expenses – The silent killer of profits

After Gross Profit comes operating expenses. For most companies (services, retail, tech, professional firms), the biggest one is payroll expenses — often 40-70%+ of total operating costs.

It shows up mainly under SG&A (Selling, General & Administrative), sometimes broken out as “Salaries and Related Costs” or “Employee Benefits.”

What’s actually included? (The full expense hit)

- Gross pay: Salaries, wages, bonuses, commissions, overtime.
- Employer payroll taxes: Social Security/Medicare (~7.65%), unemployment, workers’ comp — company pays these on top.
- Benefits: Health insurance (employer share), 401(k) match, paid time off accrual, life/disability insurance, stock-based comp (non-cash but still expensed).

Key notes
- Direct labor (factory workers) goes into Cost of Sales — not here.
- Payroll is usually the largest controllable expense. It grows fast with headcount or benefit inflation.
- Watch: Payroll rising faster than revenue? Red flag — inefficiency or over-hiring.

#FinancialInsight #PayrollExpenses #IncomeStatement #OperatingExpenses #BusinessFinance

[FinancialKnowledge @FinancialK82290]

Financial Insight 6:

Part 3 SG&A: Other External Expenses

“Other external expenses” = the third-party costs companies pay outsiders for, tucked inside SG&A.

Typical lineup:
- Consulting & advisory fees
- Audit, legal & accounting bills
- IT outsourcing / cloud service vendors
- Marketing agencies & digital ad spend (agency portion)
- Temp staffing / contractors
- Payroll processors, recruiters, facility management firms

Quick vibe check:
These usually flex with activity — hiring waves, big projects, turnarounds, M&A cleanup → they spike.

Red flag territory:
- Labeled “non-recurring” or “one-time” quarter after quarter → it’s recurring now
- Growing faster than revenue for several periods → core cost base is quietly rising, normalized margins weaker than reported

Pro move: Strip the chunky consulting/legal spikes when building a clean run-rate SG&A to see the real operating engine.

[FinancialKnowledge @FinancialK82290]

Financial Insight 7:

Other Operating Income & Expense

After operating expenses (like SG&A from Insights 4–6), many income statements show a small line called Other Operating Income or Other Operating Expense (sometimes combined as “Other Income/(Expense), net”).

What goes in here?
Stuff that’s part of normal operations… but not core selling or admin costs.

Common examples:
- Other operating income (positive):
- Gains from selling old equipment
- Rental income from unused buildings
- Government grants or subsidies
- Insurance payouts for business losses

- Other operating expenses (negative):
- Restructuring charges (layoffs, factory closures)
- Litigation/settlement costs
- Impairment losses (writing down bad assets)
- Foreign exchange losses on operations

Why it matters – keep it simple
This line is usually small… but it can swing profit a lot in one quarter.

- Big positive number? → Profit looks better than the real business performance
- Big negative number? → Profit looks worse (sometimes companies hide recurring costs here)

Quick red-flag checks anyone can do:
- Is “other” income/expense huge compared to normal profit? → Dig deeper
- Does the same “one-time” cost keep appearing every few quarters? → It’s probably recurring — subtract it to see true earnings power
- Is the company suddenly full of “other income” every good quarter? → Be careful, core business might be weaker

Bottom line:
Other operating income/expense = catch-all bucket for non-core but still operating items.
Always ask: “Is this normal and repeatable, or is management dressing up (or down) the numbers?”

#FinancialInsight #IncomeStatement #OtherOperatingIncome #OtherOperatingExpense