The Profit and Loss Statement, or P&L, is a critical business document outlining a company's financial performance over a particular accounting period, such as a month, quarter, or year. It primarily lists the revenues earned, subtracts the associated costs and expenses, and determines the profit (or loss) achieved.
For example, a P&L statement for a retail business might show total sales figures as revenue and list cost of goods sold (COGS), wages, utilities, and rent as expenses. The difference between revenue and expenses will indicate the net profit or loss for that period.
This statement is instrumental for stakeholders, including management, investors, and creditors, to assess profitability and make informed decisions. For those utilizing tools like Easy Month End, incorporating P&L reviews within their month-end close procedures ensures accuracy and facilitates thorough analysis and reporting.