2.  Profit and Loss Statement
 Balance Sheet
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3. At the end of this session you will be able to…
 Apply the basic concepts of Financial Management to
various business practices.
 Describe the components of Profit and Loss Statement.
 Explicate components of Balance sheet.
 Differentiate between Assets and Liabilities.
 Analyze the Financial Numbers of the Company based
on the provided report.
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5. A Company's Profit and Loss or Income
Statement is a record of its earnings or
losses for a given period.
It reflects the amount the Company
earned (revenues) and the amount a
Company spent (expenses) during this
period.
It measures the profitability of the
Company over a period of time, which
is generally a financial year.
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6. In the Income Statement the
Bottom Line refers to the
made for the
period under consideration
and the top line refers to
.
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7. All and are
the components of Profit and Loss Account.
A profit and loss statement is based on
two basic equations:
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8. A Typical Profit and Loss Statement would look like-
Sales
Less: Sales Returns
Less: Cost of Goods Sold
Gross Profit
Less:
Administrative Expenses
Sales and Advertisement Expenses
Earnings before Depreciation Tax and Interest
Less: Depreciation
Interest
Profits before Tax
Less: Tax expenses
Profit after Tax
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