Profit & loss
A profit and loss statement is a presentation of the profits earned or losses incurred by an enterprise during a specified period of time, according to accounting.
It is a statement which takes into account all the income of the enterprise, such as revenues from sales, investment income etc, and also all the expense of the enterprise such as cost of goods sold, administrative expenses etc.
The bottomline of the profit and loss statement is the net profit or loss.
One of the three types of financial statements that businesses prepare is a P&L statement. The balance sheet and the cash flow statement make up the other two. The P&L statement’s goal is to display a company’s earnings and expenses for a given time period, typically one fiscal year.
Analyst use profit and loss statement, for financial analysis and investment decision making.
Different countries have different formats for making profit and loss statements. The Schedule III of the Companies Act 2013 provides guidance for the preparation of a profit and loss statement in India.
Below is an example of a profit and loss statement in India.