Business Dictionary
P&L
Definition
Profit and Loss statement; a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period.
Deep Dive
A Profit and Loss (P&L) statement, also known as an Income Statement, is a crucial financial document that summarizes a company's revenues, costs, and expenses over a specified accounting period, typically a quarter or a year. It essentially shows how profitable a business has been by subtracting all operating and non-operating expenses from its total revenue. This statement is vital for understanding a company's financial performance, revealing whether it generated a net profit or incurred a net loss during the period.
Examples & Use Cases
- 1A tech startup analyzing its quarterly P&L to understand subscription revenue growth and server infrastructure costs
- 2A retail chain reviewing its monthly P&L to track sales performance against inventory costs and store operating expenses
- 3A software company using its annual P&L to assess the profitability of new product lines after accounting for R&D and marketing spend.
Related Terms
Income StatementBalance SheetCash Flow Statement