What Is a P&L Statement?

Updated: February 12, 2023
A P&L statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year. The P&L statement is one of the key financial statements used by management to make decisions and by investors to assess a company's financial health.
Detailed answer:

A P&L statement is a financial statement that summarizes a company’s revenues, expenses, and profits/losses over a specified period of time. The abbreviation P&L stands for Profit & Loss.

The statement can be used to assess a company’s financial performance and to make decisions about where to allocate resources. The P&L statement contains a breakdown of sales by product line or service category, as well as the cost of producing those goods or providing those services. A company can use this information to identify any areas where it needs to improve its operations or reduce costs in order to increase profitability.

A profit and loss statement typically includes information on a company’s sales, cost of goods sold, operating expenses, and net income. It may also include other items such as interest income (or expense), taxes paid or accrued during the period covered by the statement, depreciation expense or amortization of goodwill.

Income statement can be prepared on a monthly, quarterly, or annual basis. It may also be presented using various formats depending on how much detail you want to include.

It can also be used in conjunction with other financial statements, such as a balance sheet or cash flow statement, to get a more complete picture of a company’s financial health.

A P&L statement can be helpful in identifying areas of your business that may be ripe for cost-cutting or efficiency improvements. For example, if your company has recently experienced falling sales and rising costs, then you may want to take a closer look at your marketing expenses in order to reduce them and improve profitability.

What Is a P&L Statement?. (2023, Feb 12). Retrieved from https://graduateway.com/qa/what-is-a-pl-statement/