Profit and Loss Accounts

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AS - Level (Theme 2) Business Studies Fichas sobre Profit and Loss Accounts, creado por Charlotte Summerly el 07/03/2016.
Charlotte Summerly
Fichas por Charlotte Summerly, actualizado hace más de 1 año
Charlotte Summerly
Creado por Charlotte Summerly hace más de 8 años
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Pregunta Respuesta
What is profit and how does it differ from cash? Cash is physical Profit is long term
What is profit? Total revenue - total costs
Types of profit Gross profit Operating profit Net profit
Gross profit Revenue - variable costs Gross profit refers to profit made after fixed/direct costs are met
Operating profit gross profit - overheads
Net profit operating profit - interest and exceptional costs Net profit could be calculated before and after subtraction of taxes
What is profit and loss account? - aka statement of comprehensive income - financial performance of past 12 months - seen in business plan - comparisons can be made
Profit and loss account and cash flow forecast The difference between this and a CFF is simply the detail in document for instance tax is often considered and profits are calculated
Why is it a good idea to calculate profit/loss? - shows financial health - avoid failure - record of incomes - compare trades - legal requirement - LTD are required to publish this account - can look at how to generate higher profits
Calculate profit and loss accounts Percentage changes in profit = (current years profit - previous years profit / previous years profit) x 100
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