What is Profit&Loss (P&L) Statement ?

Definition : Also known as Income statement, is a financial statement which shows expenses and revenue of a company during a particular period, usually a fiscal quarter or year.
Read : What Is Balance Sheet ?
Income Statement helps to convey the status of a company i.e. Company is making profit or suffering losses. It is very important to read Income Statement of a company before investing, both of recent and past years.
Note : Revenue : Total amount received from sales of goods and services. Expenses : Total amount spend in producing final product or service.
Structure of P&L Statement  Income Statement is divided into Five main section - Net sales, Cost of Goods Sold, Gross Margin, Operating Expenses and Net Profit Before & After Income Tax (Or Net Loss in case of Loss).
Net Sales : It is the sum of Gross sales excluding its returns, allowances and discounts.Cost Of Goods Sold : Amount of money used to produce the final product. For example cost of inventory, merchandise purchased…

Standalone And Consolidated Financial Statement

Financial Statement of a Company are of two types :

Veirdo Men Cotton T-shirt
Click on Image To Buy

Standalone Financial Statement

 It is the Financial statement of a parent company alone, excluding other legal entities. Standalone treat each entity entirely separate For e.g. Parent company are unrelated to its subsidiaries and subsidiaries are unrelated to one other.

Read : Top 5 Tycoon Of Wall Street

Consolidated Financial Statement

 It is the financial statement of a parent company including its Subsidiaries, Joint Ventures, Associated Companies, etc. In this financial statement parent company and its branches are taken as a single company operating under a roof.

Difference between Stand-alone and Consolidated Financial Statement :

As we have discussed in Standalone we do not include other branches of a parent company and in Consolidated, Parent Company and its subsidiaries,etc are taken as whole to create financial statement.

Lets discuss this difference with an example for better understanding :

 See Also : 9 poster Boys Of Indian Startup Industry

Example : Alphabet Inc is a American Multi-national. It is the parent company of Google, Google Fiber, Chronicle, and several former Google Subsidiaries.
Here, Financial Statement of only Alphabet Inc excluding google and other subsidiaries will be the Stand-alone financial statement where as Financial statement of alphabet including Google, Google Fiber, Chronicle, etc will be the Consolidated Financial Statement of Alphabet Inc.

Other Articles

Return On Equity
What Kind Of Investor Are You ?


Popular posts from this blog

Use These Eight Steps For Easy And Time Saving Stock Analysis

10 Terms You Need To Know Before Reading Balance Sheet

Stock Analysis - Technical And Fundamental