Bookkeeping and Accounting All-in-One For Dummies, UK Edition

Chapter 1

Producing a Profit and Loss Statement

In This Chapter

Sorting out the elements of a Profit and Loss statement

Preparing the statement

Analysing statement data

Zeroing in on profitability

Without one very important financial report tool, you can never know for sure whether or not your business is making a profit. This tool is called the Profit and Loss statement, and most businesses prepare this statement on a monthly basis, as well as quarterly and annually, in order to get periodic pictures of how well the business is doing financially.

Analysing the Profit and Loss statement and the details behind it can reveal lots of useful information to help you make decisions for improving your profits and business overall. This chapter covers the various parts of a Profit and Loss statement, how you develop one and examples of how you can use it to make business decisions.

Lining Up the Profit and Loss Statement

Did your business make any profit? You can find the answer in your Profit and Loss statement, the financial report that summarises all the sales activities, costs of ...