ABSTRACT
The main purpose of the chapter which follows is to suggest a practical method of analysing and interpreting financial statements, with particular emphasis on the profit and loss account. The emphasis on the profit and loss account stems from practical considerations. All practising managers and senior executives see a profit and loss account once a month and, indeed, have responsibility for it; and only a small percentage of such managers and senior executives will see a balance sheet or a funds flow statement more than once a year. Most certainly the majority of hotel and catering managers who are employed by groups or chains, rather than individual establishments, never have the opportunity to see a full set of financial statements of the organization which employs them.
