We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.

Key takeaways from this chapter

  1. Essential items to look at under the P&L are;
  2. Revenue
  3. -Heavy Expenses
  4. -Tax Rate
  5. -PAT
  6. Essential Items to look at under the Balance sheet are;
  7. -Long-term Borrowings
  8. -Accounts Receivable
  9. -Cash in hand/Bank
  10. Profit after Tax flows from P&L to Balance sheet.
  11. Cash & Cash Equivalents flow from the Cash Flow Statement to the Balance sheet.


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  1. Amogh says:

    This was so helpful. Thanks alot!

  2. Robin Sethi says:

    In the summary of the video, under the Cashflow statement box (@4:12), the first line item should be “Operating Activities” instead of “Balance Sheet”, it must have been a typo. Thank you, Karthik and team Zerodha for all your efforts in making such content available.

    • Karthik Rangappa says:

      Ah, thanks of pointing that RObin. Not sure if we can edit that now. But I hope can figure its a typo 🙂

  3. Aasheesh Samuel Chhewang says:

    Sir could you please tell me how to calculate at what percentage the company has taken the loan?

  4. Aasheesh Samuel Chhewang says:

    Sir you have explained in the video the finance cost part, that’s what I am not able to understand that how do I calculate at what percentage the company has taken its long term loans or borrowings? ( Like in balance sheet finance cost states that it is the interest amount paid by the company. So I want to know the figures or amount from which that finance cost has been calculated and written there.)

    • Karthik Rangappa says:

      For that, please check the notes or schedule associated with the liabilities. The notes will give you a detailed split.

  5. Sb says:

    Very good teaching. Nice presentation with example.

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