Chapter 17 Financial Management simplified (1)

FINANCIAL
MANAGEMENT
Chapter 17

THE INCOME STATEMENT
The income statement is a summary of
financial information for a defined
accounting period.

THE INCOME STATEMENT
The income statement (also called a Profit and
Loss Statement [P & L] or a Statement of
Operations) shows whether the business made or
lost money during the period being reported.
For this reason, it presents important
information to all stakeholders of the operation.
Owners; Investors; Creditors; Managers ….

THE INCOME STATEMENT
An important difference between the income
statement and the balance sheet is that the
income statement represents a period of time and
the balance sheet represents a given point in
time. An income statement is said to be dynamic,
whereas the balance sheet is static.
The cost of food sold in a foodservice
establishment is calculated using the following
procedure: