How to Read Profit and Loss Statement + How to Read a Balance Sheet (Set of 2 Books)

How to Read Profit and Loss Statement

On hearing the term ‘business’, the first thought that comes to mind is of its profitability. The Profit and Loss (P&L) Statement is one of the chief indices of profitability of a business and the key driver of strategic organizational decisions. This new edition evaluates those queries related to the P&L Statement that reflect the total financial wellbeing of an organization: from defining a P&L Statement to its key components and methods of computation; from the relationship between Balance Sheet and P&L Statement to analyzing the P&L Statement of a manufacturing concern. Similar to the earlier edition, various intriguing portions have been dealt with through amusing conversations infused with witty answers relating to P&L Statement. Additionally, the new edition elaborates on certain other equally important sections of the P&L Statement that were not addressed in such detail earlier. This edition answers questions such as:

• Why is it important to maintain a P&L Statement?
• What items do we need to consider while preparing this statement and why?
• What perspective do investors have while analyzing a P&L Statement?

Presented in simple language through some short story like examples to set the stage and tone for theoretical discussions, this edition also includes ample exercises along with answer keys.

Table of Contents:

Preface

Acknowledgements

Introduction

• The Income Statement – An Introduction
• Accounting Principles
• Measurement of Income
• Preparation of Income Statement
• Income Statement and the Balance Sheet
• Inventory Valuation
• Income Statement of a Manufacturing Concern
• Possible Future Expenses
• Depreciation, Amortization and Depletion
• Solved Illustrations

Summary and Exercises

Index
How to Read a Balance Sheet
The function of a correctly prepared Balance Sheet is to exhibit the true and correct view of the state of affairs of any concern. This new edition targets those questions related to the Balance Sheet that arise from some tricky sounding financial jargons which play important role in determining the overall fiscal health of the organization. Like in the earlier edition, readers would be taken through witty conversations infused with answers but this time they will cater to certain other equally important sections of the Balance Sheet that had not been previously addressed.
Highlights of this edition:

• Real-life Balance Sheet illustrations on actual figures of five Indian Retail Apparel companies, along with their ‘Common-Size’ Balance Sheet illustrations and ‘Shareholders Funds’ illustrations.
• Identifying financial terms such as Capital Structure, Bad Debts, Advance from Customer, Notes to Accounts, Principle of Conservatism, Contractual Obligations or Ensuring Restrictions and Post-Balance Sheet Disclosures.
• Understanding the limitations of the Balance Sheet.
• Revised Exercises

Table of Contents:

Preface

Acknowledgements

Introduction

• The Balance Sheet
• Importance of a Balance Sheet
• The Assets Side
• The Liability Side
• The Owners Equity
• Formats of the Balance Sheet
• What to See in a Balance Sheet?
• Example of Balance Sheet

Exercises