Financial statements are financial summaries that measure the business financial health and over a given period of time and how well it’s fairing on in monetary terms. There are various financial statements. However, the most common financial statements include Profit & Loss account (P&L a/c) and Balance Sheet.
The other financial statement includes Cash flow statements. Profit & Loss Statement is also called income statement. P& L a/c is a financial summary of the operating incomes and operating expenses among other expenses professionally prepared to deduce the operating profits. P&L a/c is made up of two parts; Trading account which calculates the gross profits/ loss. The second part calculates the net profits by deducting the operating expenditures and tax from the gross profits.