We introduced you to the three key statements of accounts in the Learning & Development group, in the last post.
The three key statements we listed were :
- The Profit & Loss Account / Income & Expenditure statement
- The Balance Sheet
- The Cash Flow statement
We briefly talked about the Profit & Loss / Income & Expenditure Statement, which represented the status of operations, the financial success or failure of what the business did over a defined period of time.
A standard vertical format for this statement will comprise of:
Less: Cost of Sales
Selling and Marketing (S&M) expenses
General and Administrative(G&A) expenses
Research and Development (R&D) expenses
Income(Loss) from Operations (EBIT)
Add:Other Income (e.g. Interest Income, Gain on sale of fixed asset)
Less:Other Expense (e.g. Interest Expense, Loss on sale of fixed assets)
Income before Unusual Items and Income Tax
Add/Less: Unusual or infrequent items
Income before tax
Less: Provision for Taxes (Current and Deferred)
Income after tax
More on these to follow ….