Glossary

The Profit & Loss statement (P&L), also known as the income statement, is a financial report that summarises a company's revenues, costs, and expenses over a specific period, typically a quarter or a year.

The P&L statement provides an overview of a company's profitability and financial performance during the given time frame. It shows the net income, which is the result of revenues minus expenses. 💼

For example, a UK-based retail company might report the following on its P&L statement: £1 million in total revenue, £600,000 in cost of goods sold, £200,000 in operating expenses, and £100,000 in taxes. The net income would be £100,000 (total revenue - cost of goods sold - operating expenses - taxes).

Fun fact: The P&L statement is one of the three key financial statements required by both public and private companies, along with the balance sheet and the cash flow statement. 📘