Example:
![The profit and loss account](https://revisiontown.com/wp-content/uploads/2024/04/Screenshot-2024-04-21-at-7.45.29 PM-768x824.png)
Disadvantages
- Shows historical performance, there is no guarantee that future performance is linked to past performance or success.
- Window dressing can occur (i.e., legal manipulation of accounts to make them look financially more attractive).
- There is no internationally devised formula, therefore its not completely transferable.