What is Profit and Loss?

The term profit and loss (P&L) statement refers to a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a quarter or fiscal year. These records provide information about a company’s ability or inability to generate profit by increasing revenue, reducing costs, or both. These statements are often presented on a cash or accrual basis.

The Profit and Loss Statement includes the following,

  • Income
  • Expenses
  • Profit and Loss = Revenue – Expenses