Mini-masterclass with Chartered Accountants Kelsey Garratt and Catherine Cresswell.
Financial fluency is for everyone, since most of us are responsible for either growing revenue or managing costs. Being able to read the numbers isn’t a nice-to-have, it’s a critical skill as we progress in our careers, for boards, and of course, when building a business.
Kelsey Garratt and Catherine Cresswell are Chartered Accountants who came up through Deloitte, crossed paths at Xero, and have since moved into senior strategic roles. They’re big advocates for non-finance people learning the fundamentals of financial statements – starting with the P&L:
💡 There are four common financial statements. The Balance Sheet is your annual doctor’s checkup – a snapshot of what you own and owe. The Profit & Loss Statement (P&L, also called the Income Statement) is your smartwatch, telling you how you’re performing right now.
💡 The P&L follows the same flow, no matter the company. Revenue (the top line, money in) → cost of goods sold (costs to make sales) → gross profit → operating expenses (the ‘keeping the lights on’ costs) → net profit, also called net income (the bottom line, what’s left in the end).
💡 Numbers don’t live in a vacuum. Compare the same period last year, not last month. The budget is set at the start of the year and stays fixed; the forecast updates as the year unfolds. The variance column is where you spot problems before they spiral.
💡 A healthy P&L can still be hiding something. Metrics – simple ratios that layer context onto the numbers – let you dig into the health of the business. Spot a signal, add what you know about the business, and you’ve got something to start a conversation.
Want to practise on a real one? Check out the Spotify P&L on Yahoo Finance and see how much they make off of our subscriptions!
Mini-masterclass: Finance 101: the fundamentals
Mini-masterclass: How to negotiate your salary
Expert interview: You’re not bad with money
Expert interview: What’s your money personality?
Expert interview: Calculate your work worth
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