Profit and Loss
Last reviewed 2026-05-11 by Asad Ali, Founder & CEO
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.
Common Questions About Profit and Loss
What is an example of profit and loss?
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 does profit and loss matter for my business?
The P&L is the simplest answer to the fundamental question "is my business making money?" and should be reviewed monthly at minimum.
How does FiscalInsights help with profit and loss?
FiscalInsights tracks profit and loss automatically as part of its AI bookkeeping workflow. Connect your bank accounts and the platform handles categorization, reconciliation, and reporting without manual entry.
Related Terms
More Business Terms
Accounts Reconciliation
Ensuring account balances match between different records.
Break-Even Point
The sales volume at which total revenue exactly equals total costs — neither profit nor loss.
Financial Statements
Reports summarizing financial performance and position.
Fixed Costs
Expenses that remain constant regardless of production.
Variable Costs
Expenses that change with production or sales volume.
Related Business Guides
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