How to prepare a profit and loss account
This statements is the most interesting for the company management, as it shows the performance of the enterprise for the accounting period. Let’s examine the simplest form of the statement: The report is divided into two parts: Profit; Loss. In Profit part we should deduct the cost of the goods sold (line 2) from the sales volume for the accounting period (line 1). This way we get the gross profit (line 3). I insist on using the gross profit rate (line 4), as this is an indicator of your profit share...