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Gross profit (GP) ratio
Income Statement Definition
Essay 1. Section of the Companies Act, requires the Board of Directors of every company to lay at every annual general meeting held under section — i a balance sheet as at the end of the accounting period, and ii a profit and loss account for that period. The financial year may be less or more than the calendar year, but its maximum duration is fifteen months. No form of profit and loss account has been prescribed in the Companies Act.
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Profit and loss accounts and balance sheets are two of the most useful tools to see how well a company is performing. It will show how much the company has earned, how much it has spent to earn that amount and the difference between the two, which is the profit or loss made. Subtract from that the fixed costs for example insurance, marketing, administration costs etc to find the net profit.