Profit and Loss
Another name for the income statement.
The profit and loss (P&L) statement is another name for the income statement, summarizing revenue, costs, and expenses over a period to show whether the business earned a profit or incurred a loss. The P&L is the most commonly reviewed financial report for small businesses and is typically the first document a lender or investor examines.
Example
A restaurant owner reviews the monthly P&L showing $85,000 in revenue, $32,000 in food costs, $28,000 in labor, and $18,000 in overhead—leaving $7,000 in net profit.
Why It Matters for Your Business
The P&L is the simplest answer to the fundamental question "is my business making money?" and should be reviewed monthly at minimum.
Related Terms
More Business Terms
Accounts Reconciliation
Ensuring account balances match between different records.
Break-Even Point
The sales volume at which revenue equals costs.
Budget
A financial plan estimating income and expenses.
Financial Forecast
A prediction of future financial performance.
Capital Expenditure
Funds used to acquire or upgrade physical assets.
Related Financial Guides & Resources
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