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What is a cash flow statement, profit loss, and balance sheet?

All these are financial statements, the preparation of which is mandatory for all the Public Ltd Companies along with Statement of Change in Equity in accordance with the provisions of Companies Act, 2013. 1)Profit and Loss Statement - It is statement of income/opertion prepared quaterly and annually showing the end result of business operation during the concerned period i.e.Profit or Loss. It gives information about revenues earned from business operation, other incomes, all expenditures during the period and profit earned or loss incured. 2)Balance Sheet - It is a statement of position on a particular date, showing the resources controlled by the business, capital owned by it and the fund it owes to the outsiders. In otherwords it shows the Assets, Capital and Liabilities. 3)Cash Flow Statement - It is a statement of historical flow of cash and cash equivalents from operating, investing and financing activities. Cash equivalents include marketable securities that can be readily converted to cash without a significant loss of value. Operating activities are day to day revenue generating activities of business. Investing activities involve acquisition and disposal of longterm assets. Financial activities lead to change in capital composition of the business i.e. issue or redemption of share capital.

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