Reference
P/L
Abbreviation for “Profit & Loss statement.”
Reference
ROE (Return On Equity)
Income statement
“ROE (Return On Equity)” is the rate of
profitability per unit of assets or shareholder equity. It shows a ratio of net income ( the return ) against capital
(shareholder’s equity) for the number of
shares of stock issued. In short, it answers the question of how much profit
is being returned for the money entrusted to the company by shareholders, as
an index of managerial efficiency.
ROE = Net income ÷ shareholder’s equity × 100
From: 1 April 200X
To: 31 March 200X
Reference
Current ratio
“Current ratio” is an index that shows to
what extent current assets exceed current liabilities. The current ratio, as a
percentage is given by the formula (current assets ÷ current liabilities) × 100.
Higher values are indicative of stable
corporate management.
Reference
Profitability
“Profitability” is an index expressing
how much capital is used and how
much profit is produced. Profitability =
gross profit margin × total asset turnover, where gross profit margin = profit ÷
revenues and total asset turnover =
revenues ÷ assets.
The higher the value, the greater the
profitability.
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(2)Income statement (P/L)
An “income statement” or “P/L (Profit & Loss statement)” shows a
corporation’s profits and losses for a fixed period. Disclosing expenses
(losses) and income (profits) makes it possible to ascertain the state of the
corporation’s finances.
(units: million yen)
Sales
1,000
Cost of goods sold
65 0
Gross profit
350
Selling, general and administrative expense
200
Operating income
150
Non-operating income
30
Non-operating loss
50
Ordinary income
130
Extraordinary profit
10
Extraordinary loss
Pre-tax profit
20
120
Corporate taxes, etc.
50
Net income
70
(3)Cash-flow statement
A “cash-flow statement” represents the flow of cash over a fixed period,
by how much cash was on hand at the start of the period, and how much is
left at the end. Preparing a cash-flow statement clarifies where money is
going, and by looking at it alongside a P/L and B/S, it should be possible
to manage funds predictably and formulate a fund-management plan for
more efficient business management.