Episode 12: How to Read a Veterinary Practice Profit & Loss Statement (P&L)

How to Read a Veterinary Practice Profit & Loss Statement (P&L): Benchmarks, EBITDA, and Monthly DecisionsJohn Younker, DVM, MBA explains how veterinary practice owners can read and use a profit and loss (P&L) statement to make better business decisions. He uses an analogy comparing it to a car’s speedometer with profit at the bottom, revenue pushing up and expenses pulling down. He clarifies why profit on a P&L won’t match cash in the bank due to debt principal payments and capital expenses, and notes cash flow statements and balance sheets cover those areas. He breaks P&L rows into four expense groups—COGS, payroll, overhead, and other expenses—then defines EBITDA and how it’s used for performance comparisons and practice valuation. He recommends getting the P&L by the 15th monthly, reviewing it with a practice manager, and tracking six key numbers with benchmarks: revenue, COGS (20–23%), total payroll (≤40%), staff payroll (14–20%), overhead (~15%), and EBITDA (20–25%).00:00 Financial Literacy Wakeup01:25 P&L as Dashboard02:37 Profit vs Cash03:36 P&L Layout Benchmarks04:45 Expense Groups Overview05:02 COGS Explained06:01 Payroll and Owner Pay06:31 Overhead and EBITDA08:20 Other Expenses Net Income09:29 Monthly Review System10:25 Six Numbers to Track11:44 The 20 40 15 Rule12:30 Revenue Trend Checks13:04 COGS Control Levers14:46 Total Payroll Ceiling15:15 Staff Payroll Fixes16:58 Associate Pay Hiring19:38 Overhead Fixed Costs20:37 EBITDA vs Net Income22:25 Benchmarks and Tradeoffs23:32 TLDR Checklist26:35 Wrap Up Next Steps