Three statements: a 5-minute overview

Every listed company in India files three core financial statements every quarter and every year. Together they tell you:

• How much the business earned (Profit & Loss - P&L)
• What it owns and owes (Balance Sheet)
• Whether cash actually came in (Cash Flow Statement)

A company can look profitable on paper but be cash-starved in real life, or look highly indebted but generate enormous cash. You can only see the full picture by reading all three.

What each statement covers

Profit & Loss (also called Income Statement) - a movie of the quarter. Top line: how much the company sold. Bottom line: what was left after every cost. The middle lines show where the money went - raw materials, employees, electricity, depreciation on machines, interest on debt, and tax.

Balance Sheet - a photo at one moment in time (usually 31-March for the year, or end of each quarter). On one side: everything the company owns (assets). On the other: who that money belongs to - lenders (liabilities) and shareholders (equity). The two sides must balance, hence the name.