Turnover
Total invoiced sales for the period, net of VAT. UK
sales, exports and overseas sales and inter-company
sales will be included.

Cost of sales
Cost components directly related to turnover.

Gross profit
This indicates the profit before deducting depreciation,
distribution, selling and administration costs. It is an
indicator of the underlying profitability of a business’s
core operations.

Operating Profit
Indicates the profit and loss arising from core business
activities. The figure is pre-tax profit plus Interest paid
minus non-trading income.

Non-trading income
Comprises investment income, such as income from
quoted and unquoted investments, rents received, share
of profit from associated companies; as well as reserves adjustments, such as transfers from capital grant reserve.
Interest relief grants. Write-offs of investments and
intangibles will also be included.

Interest Payable
Interest paid by the business. This will be the net charge
for interest after any capitalised element. It should be
noted that many private companies do not disclose this
figure in full, or aggregate short and long term and hire
purchase interest together.

Pre-tax profit
The net trading profit figure after deduction of all
operating expenses including depreciation & finance
charges, but before deduction of tax, dividends,
subventions or group relief, and other appropriations.
Where applicable it will include the share of profits and
losses of associated companies. Items described by
the company as exceptional are included. Extraordinary
items are excluded.

Taxation
Tax charges paid against profits. This can be negative, representing a tax credit.

Profit after tax
This figure represents the profit or loss after deduction
of corporation taxation but before the deduction of
dividends, minority interests and any extraordinary
items.

Dividends payable
This item includes both proposed and paid items and
provisions / appropriations determined by FRS4.

Retained profits
This figure is after the deduction of extraordinary
items, taxation, dividends and any other appropriations
(e.g. Minority Interests). Essentially, this is the amount
carried from the Profit and Loss Account to the
accumulated Profit and Loss Account balance on the
Balance Sheet.

Value added
Trading Profit plus salaries and wages. It should be
noted that for the value-added calculation, Staff Costs
are grossed up to reflect national insurance costs.
Value Added represents the difference between the
Sales Income received and Bought-in materials and
services expended in the period.