Also known as an “Income Statement”, or shortened to “P&L Statement” or simply “P&L”, a Profit and Loss Statement is a financial report that includes a business’s total revenue, expenses, gains, and losses, arriving at net income for a specific accounting period. Management analyzes a P&L to determine how to increase profitability by increasing revenue, lowering costs, or both.
EXAMPLE: Let’s take a look at last quarter’s Profit and Loss Statement to see if our administration expense went up or down.
