If you’re just starting a business, standard financial reports, like Profit and Loss Statements, Balance Sheets, and Cash Flow Statements can seem intimidating. But once you understand the terms it’s easy to see how these statements allow you to neatly track your company’s fiscal health.
You may have heard this statement referred to by other names which can make it a bit confusing at times. Some of the other terms used to describe the profit and loss statement are P&L (Profit and Loss), Income Statement, Statement of Earnings, and Statement of Operations.
A Profit and Loss Statement provides a summary of your revenue minus expenses for a specific time period, such as a month, a quarter, or a year. It tells you your bottom line net profit or net loss.
Profit & Loss Infographic by Beverly Lang