Profit and Loss Statement (P&L)

A statement of income, expenses and resulting profit or loss over a period.

The profit and loss statement (also called the income statement) summarizes revenue earned and expenses incurred over a period — a month, quarter or year — to arrive at net profit or loss.

It shows how profitable a business is and where money is being made or spent. Revenue minus cost of goods sold gives gross profit; subtracting operating and other expenses gives net profit.

• Covers a period (month/quarter/year), not a single date.
• Revenue − COGS = gross profit; − expenses = net profit.
• Key indicator of operating performance.