Any profits not paid out as dividends are shown in the retained profit column on the balance💱 sheet. The amount shown as cash or at the bank under current assets on the balance sheet will be determined💱 in part by the income and expenses recorded in the P&L.

It begins with an entry for revenue, known💱 as the top line, and subtracts the costs of doing business, including the cost of goods sold, operating expenses, tax💱 expenses, and interest expenses. The difference, known as the bottom line, is net income, also referred to as profit or💱 earnings.