This PPT slide, part of the 22-slide Financial Ratios (Comparables) Analysis PowerPoint presentation, presents a structured overview of a Profit and Loss (P&L) account, which serves as a crucial tool for assessing a company's profitability over a specified period. It outlines key components that contribute to the overall financial performance, starting with Turnover, which represents total sales. This figure is adjusted by subtracting the Cost of Goods Sold (COGS), leading to Gross Profits.

Following this, the slide details Overheads, which encompass indirect costs such as administration and depreciation. The result after deducting Overheads is referred to as PBIT (Profit Before Interest and Tax), indicating the trading profit of the business. The next step involves subtracting Interest expenses, resulting in PBT (Profit Before Tax). This metric is essential for understanding the company's profitability before tax obligations are considered.

The slide further breaks down the tax implications, leading to PAT (Profit After Tax). This figure reflects the net profit available to shareholders. The final components include Dividend distribution and Retained Earnings, which indicate how profits are appropriated—either returned to shareholders or retained for future growth.

An important note highlighted on the slide discusses the matching principle of accounting, emphasizing that costs related to assets are depreciated over time. This gradual charge to the P&L reflects the asset's usage, providing a more accurate representation of financial performance. Understanding these elements is vital for any potential customer looking to grasp the financial health and operational efficiency of a business.

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Financial Analysis M&A (Mergers & Acquisitions) Profit and Loss Sales