How we define and explain the numbers

Product profitability, available cash and a supplier payment each need a different view. The sample report pairs a September 2026 income statement with a separate 13-week cash plan. Its budget comparison uses the plan and actual scenario within the demonstration dataset.

The additional examples explain a September profit-to-cash bridge, a Shopify settlement and a timing change to an existing purchase order. Read each with its own period and balance assumptions; the settlement is a separate transaction example.

• Check whether the figure is an accrual result, a bank movement or a planning assumption.
• Read the start date, end date, currency and cutoff before comparing reports.
• Look for the costs included, costs excluded and amounts that remain unallocated.

Contribution measures what remains after the product and channel costs listed below. Operating result then deducts fixed overhead; net profit would also account for interest and income tax. Cash follows the dates of receipts and payments. The SEC's financial-statement guide explains these distinctions.

Gross product sales of $286,800 less $16,900 of discounts and $16,500 of refunds gives net sales of $253,400. Fees, fulfillment and advertising are deducted later, when calculating contribution.

Shopify defines net sales using sales reversals, which cover more than product refunds. Sales reports can also include unpaid orders. These calculations assume product-only refunds and, for the settlement example, fully captured sales. Reconcile cancellations, order edits, shipping, tax, gift cards and payment-provider coverage when using an actual export.

Net sales of $253,400 less $88,610 of COGS leaves $164,790 of gross profit: a gross margin of 65.0%. Deduct $17,240 of platform/payment fees, $26,250 of fulfillment and $54,100 of ads/affiliates to reach $67,200 of contribution, or 26.5% of net sales.

Shopify's Gross profit by product report relies on product cost recorded at sale. Check its sales coverage and missing costs before comparing that margin with a report containing additional channel expenses.

Trace expenses to the order, product or channel supported by the records. Shared costs need a stated allocation driver. Keep unsupported amounts in an unallocated row and reconcile assigned plus unallocated costs to the source total.

Fee, fulfillment and acquisition amounts in the examples are dollar inputs. For actual reporting, use recorded fees, document the fulfillment driver and separate advertising attribution from a demonstrated causal effect.

A separate allocation example divides $3,000 of handling cost across 600 units of product A and 400 of product B: $1,800 goes to A and $1,200 to B. Total allocated cost stays $3,000. Changing the driver redistributes that cost; the example sits outside the September expense totals.

• Record the cost category, source total, driver, denominator and period.
• Separate observed direct costs, allocated costs and unallocated amounts.
• Reconcile all assigned and unallocated amounts to the source total.
• Keep fixed overhead separate when comparing contribution; disclose any fuller cost allocation as a different measure.

Deduct a product refund once from sales. Record return transport, inspection and disposal in the relevant expense category. Return logistics are already included in this sample's fulfillment cost; count that expense once.

Check the returned item's condition, valuation and recorded COGS reversal before recognizing stock recovery. A cash refund and the recovery of saleable inventory need separate evidence.

IAS 2 explains when sold inventory becomes an expense. Supplier payment dates can differ from that recognition period. Use recognized COGS in the income statement and dated inventory payments in the cash plan.

The September bridge starts with a $25,200 operating result. Add back $2,500 of depreciation; subtract increases of $18,000 in receivables, $42,000 in inventory and $3,000 in operating prepayments; then add increases of $15,000 in inventory payables and $5,000 in accrued operating expenses. Operating cash flow is negative $15,300.

An $8,000 equipment payment is then shown as investing cash flow. New borrowing of $20,000, principal repayment of $6,000 and an owner distribution of $4,000 produce $10,000 of financing cash flow. Total cash falls by $13,300, from $100,000 at 31 August to $86,700 at 30 September.

The SEC guide and IAS 7 explain these cash-flow categories and balance adjustments. This operating-finance example assumes depreciation is included in overhead and interest and income tax are zero. Its balance and cash movements are separate assumptions supporting the September income statement.

Gross product sales of $24,800 less $800 of discounts produces $24,000 of captured charges. A $1,200 product refund reduces net sales to $22,800. Deduct $720 of fees and an $80 balance debit to reach $22,000 of net activity. The refund is already included in net sales.

The opening platform balance of $4,000 plus $22,000 of net activity less $20,000 of initiated payouts leaves $6,000 on the platform. Only $12,000 of those payouts reaches the bank by 30 September; the other $8,000 arrives on 2 October and remains in transit at the cutoff.

Shopify separates balance activity from accounting revenue; an initiated payout can reach the bank later. Match transaction dates, currency, payout references and bank postings. Reconcile third-party processors separately.

Carry each week's closing bank cash into the next week's opening cash. The 13-week formula is opening cash + receipts − inventory payments − other operating payments. Use expected bank receipts once, keeping accrual sales in the income statement.

An existing $70,000 PO is already included: $15,000 in week 4 and $55,000 in week 6. Week 6's $67,000 inventory payment also includes $12,000 for other stock. Move the $55,000 balance to week 8 by removing it from week 6 first. Both schedules pay $242,000 for inventory and close with $91,000 of cash.

The minimum moves from $31,500 in week 6 to $70,500 in week 8. This timing comparison assumes supplier agreement and unchanged delivery, stock availability and receipts. Test changes to order quantity or delivery against their own stock and cash effects.

Compare the same business scope, currency and time basis. The settlement example uses UTC. For your records, identify the store/report time zone and bank posting cutoff, including any difference between them.

The examples store whole USD amounts and show exact dollars in tables. Compact summaries use one decimal in thousands; percentages use unrounded amounts and display one decimal. Preserve source precision, normally cents, before rounding an actual import.

Divide aggregate contribution by aggregate net sales for channel and total margins. For example, $67,200 ÷ $253,400 × 100 displays as 26.5%. Explain a zero or negative sales denominator separately rather than averaging product percentages.

Sum component movements once. Subtotals explain the bridge, and memorandum rows keep later receipts in their actual bank period.

Assign each input a source, date, preparer and status. An actual report needs ledger records, supplier documents, bank statements and platform exports alongside its assumptions and exceptions.

State which reconciliations are complete and which missing items could change the decision. Keep a missing product cost as an unresolved input. The official sources below explain the definitions; the underlying business records support actual amounts.

Tie bank cash to the statement, resolve payout differences and reconcile allocated costs to their source totals. Confirm the accounting basis, allocation policy and assumptions with the people responsible for the books and the decision.

When a source, assumption or period changes, rerun the reconciliation and cash scenario. Record the unresolved items, their decision impact and who will confirm them before approving the commitment.

Start with the decision you need to make: trust the close, understand product contribution, reconcile a payout, or plan the next inventory payment. Bring the relevant records and identify the largest unknown. That makes the discussion more useful than a single revenue or margin number.

Use Pricing to compare scope and responsibilities for reporting, budget, cash and inventory planning. If you already have a bookkeeper, agree the handoff between ledger work and financial analysis around the question you need to answer.