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Profit and loss (P&L) statement

What is a P&L?

A profit and loss (P&L) statement, also known as an income statement, summarizes a company's revenues, costs and expenses over a specific period. It shows the net profit or loss and is essential for assessing financial performance and making strategic decisions. The P&L statement helps stakeholders understand how well the company is generating profit from its operations.

Analyzing the P&L statement allows businesses to identify trends, assess the impact of cost-control measures and make informed decisions about future investments. It’s a very important tool for financial planning and analysis, providing insights into areas where the company can improve profitability and efficiency.

Related terms

Account Reconciliation
Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.
Accounts Payable
Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.
Accounts Receivable Turnover
The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.
Advanced Revenue Management (ARM)
Advanced Revenue Management (ARM) refers to a set of strategies and practices used by businesses to automate, streamline, and ensure accurate revenue recognition according to accounting standards.
Automated Cash Application
Automated cash application (also known as automated cash posting or automated cash matching) is a process in accounting and financial management that uses technology and algorithms to match incoming payments or cash receipts with corresponding invoices or accounts receivable entries in an organization's financial records.
Average Days Delinquent
Average day(s) delinquent (ADD) is a metric that helps determine the efficiency of a company’s debt collection efforts.