during a particularreportingperiodusingtheaccrualsprinciple.We show thecost of goodsold(COGS), forexamplelabor costs cost of employeessalaries and thecost of materials.General expenses thecostsrelatedtomakingthesesalessuchassalespeoplessalaries, rent forbuildings, etc. A cost of depreciation thisisnotanactualsum of money paid out, butis showni theaccountstoallowforthewaythatequipmentwearsout and declinesinvalueovertime and willhavetobereplaced. Thisleavesuswithouroperatingprofit. Thenwesubtracttheinterestpayable on money we have borrowed in the form of bonds and bank loans. This gives the profit on ordinary activities before tax of pre-tax profit. Exceptional items are to report, for example the cost of closing a particular operation, but fortunately this doesn't happen very often. Ofc, we pay tax on our profit, and it's called corporation tax. From the profit after tax, we usually pay dividends to shareholders, and you can see the figure for dividends per share
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