Profit & Loss Statement

What is the Profit & Loss Statement?

The Profit & Loss Statement, also known as the Income Statement, is a key financial document that summarizes a company's revenues, costs, and expenses during a specific period, such as a fiscal quarter or year. This statement provides insights into the company’s operational efficiency and profitability over the designated timeframe.

Short Description: A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period to show the net profit or loss.

• Revenue: Total income generated from the sale of goods or services.
• Cost of Goods Sold (COGS): Direct costs attributable to the production of the goods sold by a company.
• Gross Profit: Revenue minus the cost of goods sold.
• Operating Expenses: Expenses required to run the business that aren’t directly tied to product creation, such as salaries, rent, and utilities.
• Net Profit: Also known as net income, it's the total income after all expenses, taxes, and costs have been deducted from the revenue.

This statement is essential for investors, management, and stakeholders to assess the financial health and performance of a company, making it a pivotal component of financial analysis and decision-making.