PROFIT & LOSS

STATEMENT
AAE STORES 2022 (F&B VERSION)
INTRODUCTION TO P&L STATEMENT
• What is profit & loss?
• Types of P&L?
• Why is it important for our business?
• What does the statement contains?
• How many expense stages exists in the P&L?
• What is P&L analyses?
• What is the controllable & the non-controllable?
• What the bottom line or EBIDTA stands for?
 What is the profit & loss?
• The term profit and loss (P&L) statement refers to a
financial statement that summarizes the revenues, costs,
and expenses incurred during a specified period, usually
on a monthly basis or quarterly. These records provide
information about a company's ability or inability to
generate profit by increasing revenue, reducing costs, or
both. These statements are often presented on a cash or
accrual basis.
TYPES OF PROFIT & LOSS
 TYPES OF PROFIT & LOSS
Cash Method
• The cash method, which is also called the cash accounting method, is only used
when cash goes in and out of the business. This is a very simple method that
only accounts for cash received or paid. A business records transactions as
revenue whenever cash is received and as liabilities whenever cash is used to
pay any bills or liabilities. This method is commonly used by smaller companies
as well as people who want to manage their personal finances
Accrual Method
• The accrual accounting method records revenue as it is earned. This means that a
company using the accrual method accounts for money that it expects to receive in
the future. For instance, a company that delivers a product or service to its customer
records the revenue on its P&L statement, even though it hasn't yet received
payment. Similarly, liabilities are accounted for even when the company hasn't for
any expenses yet.
Why Are Profit and Loss Statements Important?

• A P&L statement is one of the three types of financial statements prepared by

companies. The other two are the balance sheet and the cash flow statement.
The purpose of the P&L statement is to show a company's revenues and
expenditures over a specified period of time, usually over one fiscal year.
• Investors and analysts can use this information to assess the profitability of the
company, often combining this information with insights from the other two
financial statements.
• It is important to compare income statements from different accounting periods.
The reason behind this is that any changes in revenues, operating costs, 
research and development (R&D) spending, and net earnings over time are more
meaningful than the numbers themselves. For example, a company's revenues
may grow on a steady basis but its expenses might grow at a much faster rate.
FIXED VS VARIABLE COST
FIXED VS VARIABLE COST
 WHAT DOES PROFIT & LOSS STATEMENT CONTAINS (EXPENSE
STAGES)
TOP LINE (SALES & REVENUE)
• COST OF SALES (TOTAL COST OF GOODS SOLD – COGS)
• GROSS PROFIT
• TOTAL INCOME
OPERATING EXPNESES
• STAFF COST
• PREMSIES EXPENSES (STORE RENTAL)
• GENERAL & ADMIN EXPNESES
• EXCHANGE GAIN & LOSS ON REVALUATION
• ADVERTISING & PROMOTION EXPENSES (MARKETING SECTION)
• TRAVELLING & ENTERTAINMENT EXPENSES
• PROFESIONAL FEES
• FINACE COST (BANK CHARGES)
• TOTAL OPERATING EXPENSES
EBIDTA (BOTTOM LINE)
• FINACE COST (INTRERST)
• DEPRETIATION & AMORTISATION
• NET PROFIT AFTER TAX