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A
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The profit and loss account
Companies’ annual reports contain a profit and loss account. This is
a financial statement which shows the difference between the revenues and
expenses of a period.
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B
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The cash flow
statement
British and
American companies also produce a cash flow statement. This gives details
of cash flows – money coming into and leaving the business, relating to:
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EXERCISES
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14.1
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Which figure in each of the following pairs is higher for a
profitable company? Look at A opposite to help you.
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1
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cost of
sales/ sales revenue
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2
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gross
profit/ net profit
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3
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EBIT/EBITDA
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4
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net
profit/pre-tax income
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5
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income tax/ net profit
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14.2
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Complete the
text with words from the box. You will need to use each word more than
once. Look at B opposite to help you.
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(1) _______________ means
making money by selling goods and services. (2) _______________ is
spending cash, for the business’s future growth, including cash acquired
by selling
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14.3
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Would the following appear as operating,
financing or investing activities on a cash flow statement? Look at the
example below to help you.
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