P &l statement expense items

Q&A: Questions & Answers Investing Basics Q&A
1

This is my first post in this forum. I’m a novice, learning to understand financial statements.
I was going through Astral P&L statement and came across the expense ‘purchase of stock in trade’.
What does this mean ? In the notes it is mentioned that, company purchased pipes, solution etc. Why does the company purchase these? From my understanding these( pipes and solution) are the finished goods of the business.
Also, what is the difference between stock in trade and finished goods ?

It would be very helpful if someone can throw some light on this

2

If you accept that Astral does not itself make all the pipes that it sells things will become clearer. ‘Stock in trade’ means goods not manufactured by the company but purchased with the sole intention of selling (usually after putting their label on it). ‘Finished goods’ are those that are made by the company itself.

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3

Thank you so much. It makes sense now.