# P&L Narrative — Worked Example

## Scenario

**Business:** Cascade Candle Co. — small DTC candle maker, primarily Shopify +
occasional local markets.

**Month:** March 2024

**Key figures:**
- Revenue: $18,400 (Feb: $15,200) → +21% MoM
- COGS: $7,360 (Feb: $5,776) → gross margin 60% (Feb: 62%)
- Net income: $4,150 (Feb: $3,100) → +34% MoM

**Drivers:**
- Spring collection launched March 8 — strong first two weeks
- Beeswax costs rose ~8% MoM from a new supplier
- Shopify fees higher due to volume; otherwise expenses flat

---

## Example narrative

> **March came in at $4,150 net — your best month yet, up 34% from February.**
>
> Revenue hit $18,400, driven almost entirely by the Spring Collection launch on
> March 8. The Lavender + Sage three-pack was your top seller, accounting for
> roughly a third of units. The last week of the month slowed after the launch
> buzz faded, which is normal — watch whether that holds in April.
>
> Gross margin dipped slightly to 60% (from 62% in February). The culprit is
> beeswax: your new supplier is running about 8% higher than your previous one.
> At current volume that's roughly $200/month — not alarming, but worth a
> conversation with them or a price comparison before next order.
>
> Expenses were otherwise flat. Shopify fees ticked up proportionally with
> sales, which is expected.
>
> **Watch list for April:** (1) Whether the post-launch slowdown stabilizes or
> continues. (2) Beeswax pricing — lock in a rate if you can. (3) You have
> $2,800 in deposits from the Petal & Bloom wholesale order that haven't
> shipped yet — those aren't revenue until delivery.

---

## What makes this narrative work

- Opens with the headline number, not a preamble
- Names a specific product ("Lavender + Sage three-pack"), not just "top sellers"
- Explains the margin compression in concrete dollars, not just percentages
- Watch list is specific and actionable, not generic ("keep an eye on expenses")
- Flags the deposit that isn't revenue yet — this is a common SMB blind spot
