Advisory · profit analysis
One profit number is hiding your real margins.
The company P&L says you made money. It can't say that your install work subsidizes your service calls, that your biggest customer is your thinnest margin, or that one location eats what two others earn. Profitability analysis splits the blended number by job, customer, and line — from reconciled books, tied back to the totals — so the next pricing or staffing call is made on the real shape of the business.
Requires a real monthly close — analysis on unreconciled books reallocates errors, not costs. Tax strategy and valuation stay with your CPA and licensed advisors.
What the split surfaces
The subsidy nobody ordered
One line of work quietly funding another — visible only when costs are assigned instead of blended.
The big customer's thin margin
Volume with scope creep and special handling — big revenue, small profit, and negotiating power you didn't know you had.
The trend, not just the snapshot
Run monthly, the split shows margins drifting while there's still time to act — not at year-end.
Quick answer
Split profit by job, customer or location when reconciled books show a healthy total but pricing or staffing decisions still feel like guesses. Each slice carries its direct costs plus a stated share of overhead, and the slices must add back to the company total, which is the check that the analysis is honest.
The monthly rhythm that keeps the split current is financial reporting; when the margin question is really a cash question, that's a cash-flow engagement.
Figure data as a table
| Line | Install work | Service calls | Company total |
|---|---|---|---|
| Revenue | 412,000 | 268,000 | 680,000 |
| Direct costs: labor, materials, subs | (226,600) | (158,100) | (384,700) |
| Owner's hours at a stated cost | (9,600) | (38,400) | (48,000) |
| Share of overhead, by written rule | (87,000) | (72,700) | (159,700) |
| Profit | 88,800 | (1,200) | 87,600 |
| Margin | 21.6% | (0.4%) | 12.9% |
Common patterns
The five places a blended profit number hides the truth.
Recurring shapes — where the surprise hides, and what the split does about each.
1 · The unassigned owner
The owner's hours pour into one segment while the P&L charges them nowhere — making the neediest line of business look like the best one. The split assigns an honest cost to your time before ranking anything.
2 · Shared costs parked in overhead
The truck, the software, the shop rent — used unevenly, charged evenly (or not at all). One written allocation rule per shared cost, applied consistently, and the segment margins stop lying.
3 · Scope creep on the anchor account
The biggest customer's "small favors" never hit an invoice, so their real margin erodes invisibly year over year. Tracked at customer level, the erosion becomes a renewal conversation with numbers in it.
4 · The loss-leader nobody promoted
A line kept "because it brings people in" — a theory the books can actually test. Sometimes true, and worth keeping deliberately; sometimes a subsidy that stopped earning its keep years ago.
5 · Growth that buys revenue, not profit
Top line up, blended margin flat — because the growth came in the thinnest segment. The trend by segment shows which growth to chase and which to reprice, while the choice still exists.
Every finding arrives with its reconciliation back to the company totals — if the segments don't sum to the P&L, the analysis is fiction, and we treat that check as non-negotiable.
FAQ · Updated October 2026
Questions about the analysis.
Read your own P&L first — the free walkthrough: how to read a profit and loss statement. Related: all advisory.
Numbers that hold up
Find out where your margin actually lives.
A strategy call scopes the split that fits your decisions — and if the books can't carry the question yet, you'll hear that first, with the honest path to ready.