10.1.1—Statement of profit or loss

The statement of profit or loss summarises revenue and expenses over a period to show gross profit, operating profit and profit after relevant items. It is a period measure, not a cash account.

Interpretation requires consistent definitions, accruals and comparison with context. Profit can differ from cash because sales and costs may be recorded before money moves.

A sale on credit can increase revenue and profit while receivables rise; the business may still need cash to pay suppliers.

A positive profit figure does not guarantee liquidity, value creation or future performance.