Revenue/profit and loss statement – is a summary of the income and expenses incurred usually over a year. It contains:
Sales/revenue/turnover- the total income earned from the company’s effort as a whole but mainly the flights of course. Marketing in effect plays a role by using the media as a window to get through to the general public and promote. This should be a signal for operations to keep up with the demand in providing the services offered. Marketing keep monitoring customers especially your target markets, understand their preferences and try and work around them and promote in way that they see value for money, if it means dropping prices and profit then so be it, as long as we stay in favor and ahead of competition. Marketing could also review their sales and whether or not the promotion strategies being used have been effective and resulted in higher income and if not then how and where can there be room for improvement. To operations, keep in tact with marketing; use them to get exact figures of flights/passengers/planes and airports to organize flights professionally and properly. Also consider special events Christmas/Easter/occasions where it would most appropriate to have special deals and discounts to increase income, research and see what/when passengers would most likely fly throughout the year. It is crucial that operations and marketing monitor and maintain the figures and review their work from previous years to see if there has been actual progress since then.
COGS- cost of goods sold- is the total cost of making sales. This is mainly looked at by operations; one main point my department cannot stress more is wasting stock. Operations, plan, prioritize and work closely with other departments, this way you are all benefitting off each other and for our company by being better organized and doing it in a cost effective way. Also by doing this you are receiving exact figures, which means your department will be able to order enough stock and in effect reduce waste to a minimal. Review stock control system, or even considering putting some in place e.g. FIFO (first in first out) e.g. if there is too much stock of food that was ordered in and its still good to be used, operations would use this on the next flight and by rotating it this way it will reduce waste or even LIFO (last in first out) where our latest stock is to be put out first which raises the value of it and produces higher income. It is possible with this system in place to organize, control and maintain stock and keep the waste levels at a very minimum. Marketing, could consider innovative ideas to provide our passengers with supreme customer service, enjoyable flight which is cost effective for us, this will have a huge impact and will provide our customers with a sense of belonging which means that they will constantly fly again with our service. However, marketing it is crucial that amounts of money spent are controlled and only spent after constant planning and organizing.
Operating and administrative costs- costs paid out to run the business. E.g. water, electrical, rent, insurance payments, interest. This is crucial to all departments that these costs are controlled and monitored to ensure money is not being wasted. As mentioned before to operations, only ordering as much stock as needed, referring to all departments the same idea only using to your exact needs and not wasting what is not needed.
Net profit and loss- the end result after all...