Presenting Financial Information

Suppose your boss asks you to send him the year-to-date six month P&L. What would you send? There are probably three alternatives:

1. Send the cumulative six month results
2. Send quarters 1 and 2 summed to a six month total
3. Send each of six months individually summed to a six month total

The proper answer is number 3. This approach has several benefits:

1. Makes it easier for the recipient to spot check accuracy by looking at values for six individual months
2. Makes it possible to do trend analysis over six months of data
3. Allows any seasonality to be obvious

Note: Unless you are a publicly traded company, I can see no reason to ever report financial information by quarter.