ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Comparing one company’s P&L statement with another in the same industry that is similar in size can further help investors evaluate the financial well-being of a company. For example, doing so might reveal that one company is more efficient at managing expenses and has better growth potential than the other.

Detailed explanation-2: -Ordinarily, the Sale of speculation or investments, being offered of resources isn’t recorded in the Income and Expenditure A/c. Profit/Loss which emerges from such a deal is recorded in the Income and Expenditure account.

Detailed explanation-3: -The P&L account takes revenues into account for a specific period. It also records any expenses or costs incurred by these revenues, such as depreciation and taxes. This can be used show investors and other interested parties whether or not the company made money during the period being reported.

Detailed explanation-4: -The financial statements used in investment analysis are the balance sheet, the income statement, and the cash flow statement with additional analysis of a company’s shareholders’ equity and retained earnings.