Read two years of retail financial statements

What is this worked example?

This is a synthetic documentation fixture for reading linked statements, not an installed retail dataset or a report export.

The figures describe two years ending 30 June 2026 and 30 June 2025. All amounts are in PKR thousands: 3,000 means PKR 3,000,000. Pakistan is the reference currency context for this example, not a restriction on the project’s country-neutral design. The fixture supplies accounting figures and selected presentation policies so that their arithmetic can be checked together. It does not establish statutory compliance, an independent accounting opinion or a real retailer’s performance.

The example is separate from the installed Cedar Studio sample used by the existing daily and monthly guides. Do not expect opening this page’s numbers to appear automatically in a demo company. No underlying sales register, inventory movement dataset, asset register or invoice collection is supplied here. Those missing schedules remain missing; they are not evidence of zero activity or a claim that the application already generates them.

Income statement

The supplied revenue, costs and profit for a period.

Statement of financial position

The assets, liabilities and equity at the period end.

Cash-flow statement

The supplied explanation of the change in cash during the period.

How does the income statement connect?

Revenue less the supplied costs produces profit of 504 in 2026 and 392 in 2025.

Read the subtotal bridges rather than looking only at the final profit. In 2026, 3,000 less 1,800 gives gross profit of 1,200. Selling and administrative costs total 540, leaving operating profit of 660. Finance cost reduces that to 630, and the supplied tax expense leaves 504. In 2025 the corresponding calculations produce 960, 514, 490 and 392. Parentheses indicate expenses in this presentation.

Administrative costs include depreciation of 60 in 2026 and 50 in 2025. Do not subtract those amounts again when reading operating profit. The tax expense is a supplied fixture figure, not a tax calculation or a recommended rate for a jurisdiction. Cost of goods sold is also supplied; the example does not demonstrate an inventory costing engine or derive cost from point-of-sale transactions.

Does the year-end position balance?

Assets equal liabilities plus equity in both years, with separate current and noncurrent components.

For 2026, current assets are inventory 400 plus receivables 350 plus cash 650, totaling 1,400. Adding equipment of 540 gives assets of 1,940. Equity of 1,504 and liabilities of 436 also total 1,940. For 2025, current assets of 1,050 plus equipment of 500 equal 1,550, matching equity 1,100 plus liabilities 450.

The loan is split between current and noncurrent portions. Total borrowing is 200 in 2026 and 260 in 2025. Do not read only the noncurrent line and conclude the business repaid 60 while ignoring the current portion; review the total movement. Likewise, a receivable is a claim still outstanding, not cash already collected. The statement balances arithmetically, but supporting schedules would still be needed to assess recoverability, classification and completeness in real records.

How does profit reach retained earnings?

Opening retained earnings plus profit less the supplied distribution equals closing retained earnings.

The 2026 closing figure of 704 follows from 300 plus 504 less 100. For 2025, 8 plus 392 less 100 gives 300. Capital remains 800 in both closing statements. Separating capital from accumulated earnings helps explain why equity changes even without a new capital contribution. The distribution is a supplied fixture event; its legal form or permissibility is not established by this arithmetic.

A common reading mistake is to treat annual profit as the whole closing retained-earnings balance. That ignores prior years and distributions. Another is to equate profit with the increase in bank. The next section explains why this profitable example increases cash by 150 in 2026 rather than by the full profit of 504.

Why is cash flow different from profit?

Noncash costs, working-capital movements, investing and financing explain the difference.

In 2026, depreciation is added back because it reduced profit without being the period’s cash payment for equipment. Finance cost is added back at this stage and then the supplied interest paid is deducted in operating cash flow. Inventory and receivables increases consume cash in the bridge, while the payable increase offsets part of that consumption. The resulting operating cash flow is 410.

Investing cash outflow is 100 for equipment. Financing outflow is 160, consisting of loan principal 60 and distribution 100. Operating 410 less investing 100 less financing 160 leaves a cash increase of 150. Opening cash 500 therefore becomes closing cash 650, matching the financial-position statement. In 2025, operating 352 less investing 150 less financing 140 leaves 62; opening 438 becomes 500.

This fixture classifies interest and tax payments as operating and distributions as financing. Those are the elected presentation policies for the example, not a statement that every reporting framework or business must classify them identically. A real reporting pack needs its applicable framework and policies reviewed separately.

Which supporting bridges catch mistakes?

Check the balances that cross statements before accepting the final totals.

These bridges reveal what the example assumes. The equipment bridge uses supplied purchases and depreciation without introducing a disposal. The tax bridge distinguishes the expense recognized from cash paid. The borrowing bridge separates principal repayment from finance cost. If a real dataset contains disposals, noncash financing or other movements, these simplified bridges would need additional supported lines rather than forcing the difference into an existing category.

The earlier opening position implied by the 2025 fixture also balances: equipment 400, inventory 220, receivables 190 and cash 438 total 1,248. Capital 800, retained earnings 8, loan 300, payables 100 and tax payable 40 also total 1,248. These derived openings help check the comparative cash-flow movements. They do not provide the missing transaction-level evidence.

How should you review this example yourself?

Recalculate each bridge in order, keeping supplied figures separate from derived totals.

1. Confirm the unit is PKR thousands and the two year-end dates are comparable.
2. Recalculate gross, operating, pretax and final profit.
3. Add current assets and liabilities, then prove the accounting equation.
4. Bridge retained earnings using profit and distributions.
5. Recalculate operating, investing and financing cash flows.
6. Tie closing cash, equipment, borrowing and tax balances across statements.

The repository fixture has an exact-decimal arithmetic verification record. That is useful evidence that the published numbers connect; it is not independent accounting sign-off and does not establish a working report exporter. Repeating the calculations is a learning exercise. To evaluate application behavior, use the installed sample or an isolated synthetic posting workflow and compare actual outputs with its own documented baseline.

When should you use another source or workflow?

Use a reviewed reporting pack when you need statutory statements or complete retail operational records.

What should you do next?

This page cannot replace an inventory ledger, customer invoice register, asset schedule or local reporting advice. The preview does not ship the complete retail workflows implied by those records. Use the example to learn how statements connect, then assess the application’s current scope against the business’s requirements. Finish with an explicit list of missing schedules instead of treating a balanced illustration as a complete set of books.

Questions before you continue

Check these boundaries before applying the procedure to a business installation.

Sources and next steps

Technical references and project behavior were checked on 16 September 2026; hosting access remains plan-specific.

• Complete synthetic retail fixture and verification record

The linked project files describe the current preview. Follow the instructions inside your exact downloaded package if a later release changes a command. Technical testing does not establish statutory compliance or independent accounting acceptance. See the project and preview limits.

• Read the installed sample’s period review
• Understand supported opening evidence