• Popularly referred to as the P&L statement, Income Statement, Statement of Operations, and Statement of Earnings.

• The P&L statement reports information on:

  1. The revenue of the company for the given period (yearly or quarterly)
  2. The expenses incurred to generate the revenues
  3. Tax and depreciation
  4. The earnings per share number

  All the negative values are written in brackets rather than a - sign

  • Full P&L statement Image

Top Line (Revenue)

• Sale of Product - Sale of products means the Rupee value of all the products company has sold during FY.
• Excise Duty - the amount company would pay to the government.

Net Sale of product - The revenue adjusted after the excise duty.

• Sales of Services - The company also draws revenue from services. This could probably be in the form of annual battery maintenance.
• Other Operating Revenue - Revenues through the sale of products or services that is incidental to the core operations of the company. Ex - by-products sales.

Total Operating Revenue - Sale of products + Sale of services + Other operating revenues

• The Note 17 (in this AR) refers to the detailed breakup of the revenue from operations.
• The Note 18 (in this AR) refers to the detailed breakup of the other revenues.
• Here, Other Income includes:
  • Interests on Bank Deposits
  • Dividends
  • Insurance Claims
  • Royalty Income
• A large ‘other income’ usually draws a red flag and it would demand a further investigation.

Expenses

• Expenses are generally classified according to their function, which is also called the cost of sales method or based on the nature of expense.

• Cost of Materials consumed - The cost of raw material that the company requires to manufacture finished goods. **(**Note 19)
• Purchase of Stock in Trade - All the purchases of finished goods that the company buys towards conducting its business.