I have been asked to do a profit and loss based on a peice of machinery which cost £46000 excluding VAT and work out how much we have paid off it using the profit. If that makes sense.
So every month what we made in hiring this out, taking out the expenditure of drivers wages, getting the machinery moved to each site etc and then the amount left over is put towards payment of the machine.
How would you set this out on a spreadsheet? In what order would you start? I know in my head what I want to do but when I try to do it I start all over again because it starts to get confusing.
Easiest way i think is to set up a spreadsheet for the year with columns for each month.
Then list the income received (hiring) and the costs (wages/relocation/etc) each month to work out the profit you have made each month from using the machine.
You should then work out how long the machine will last and what it will be worth at the end. Eg say it will last for 5 years and will be worth £4k at the end then this will give a usage cost (depreciation) which will be another cost ie (£46k - £4k)/60 months.
The income less the cost will give you the profit/(loss) each month which can be totalled for the year.
