Key elements from Financial statements
The key elements in a Profit and Loss statement is given below:I. Revenue:
Revenue from primary operations
Other income
Total revenue
II. Expenses: (listing the key elements involved in production)
II. Expenses: (listing the key elements involved in production)
A) Manufacturing expenses
i) Manufacturing variables:
Cost of Goods sold (opening+purchase-closing)Production consumables
Inward freight and STN Freight
Direct Manpower cost (manpower involved in production activities)
Utilities: Power and Fuel
Line scrap generated
Cost of Job work outsourced
Production write offs
ii) Manufacturing Fixed
Factory's Indirect Manpower
Product Design and Development cost
Machinery and factory maintenance
Machinery and factory Insurance
Depreciation of factory assets
Factory lease payments, if any
Property taxes on Manufacturing facility
B) Office and Administrative expenses
Manpower- Executives and support departments
Office Rent or lease charges
Electricity charges: Non factory Utilities General Maintenance expenses
IT Facilities expenses
Depreciation: Office assets Insurance: Office assets
Legal expenses
Audit fees
Office supplies and consumables
Conveyance expenses
Bank charges
Communication charges
C) Sales and distribution expenses:
Conveyance expenses
Bank charges
Communication charges
C) Sales and distribution expenses:
i) Marketing-Variable
Outward FreightManpower; Marketing and Sales
Trade Incentive (At times, Presented as deduction from sales)
Cash Discount
Sales replacement cost
Sales replacement cost
ii) Fixed Marketing expenses
Advertisement expenses
Sales promotion expensesWarehouse Rental/lease charges
Sales office/WH maintenance expenses
Sales Staff travelling expense
D) Finance charges
Interest on Loan facilities availed
Other finance charges
E) Net Profit before Tax
F) Tax on profit (Includes Income tax+ deferred Tax)
H) Profit after Tax
F) Tax on profit (Includes Income tax+ deferred Tax)
H) Profit after Tax
I) Appropriations from Profit
Dividend-Equity/Preference
Transfer to Specific Reserves
J) Retained Earnings (H-I)
Lets discuss each and every element in detail, in coming articles
Lets discuss each and every element in detail, in coming articles