You must be remembering Profit and Loss Account gives the results of the operations of the firm during a specific period, in the form of profit or loss. Profit and Loss Account gives more detailed report on the retained income shown in the Balance Sheet. By comparing the income statements of successive periods, it is possible to observe the growth or otherwise of the firm
The income statement, or profit and loss (P&L) statement, shows the net income for the business during the accounting period. It includes income generated, the operating and overhead costs, depreciation on assets, gains or losses on disposal of capital assets and income and expenses. It can be prepared on a cash or accrual basis. The accrual approach provides a true picture of the profitability of the business for that period by accounting for changes in the value of inventories, payables and receivables.
Items of Profit & Loss Account may be related to Corporate Finance Topics in the following manner:
Items of Profit & Loss Account Corporate Finance Topics
Net Sales Revenue Risk
Cost of Goods Sold
- Stocks
- Wages and Salaries
- Other Manufacturing expense
Gross Profit Gross Profit Margin
Operating Expenses
- Selling and Administration Expenses
- Depreciation Depreciation Policy Operating Profit
Non-operating Surplus / Deficit
Profit Before Business Risk and Reward
Interest and Tax
Interest Financial Risk
Profit Before Tax
Tax Tax Planning
Profit After Tax Return on Equity
Dividends
Retained Earnings Dividend Policy
