Profit and Loss Statement
Also called: P&L, income statement, profit and loss account
What is Profit and Loss Statement?
A profit and loss statement summarises income and expenses over a period and arrives at profit or loss. It runs from revenue through cost of goods sold to gross profit, then through operating expenses to net profit.
Why Profit and Loss Statement matters
The P&L is the fastest read on whether trading works. Compared month against month, it also shows which specific cost has drifted, rather than just that money is tight.
How Profit and Loss Statement works in practice
Compare each line as a percentage of sales, not only in rupees, so growth-driven increases are distinguishable from real cost creep. Read it beside the cash flow statement, since profit and cash rarely move together.
Frequently asked questions
No. It records income when earned and expenses when incurred, regardless of when money moves.