3 Profit and loss (P&L)

‘Business is all about solving people’s problems – at a profit.’

Paul Marsden, business consultant, writer and former politician

In a nutshell

The P&L or ‘profit and loss account’ or ‘statement of profit or loss’ or ‘income statement’ is one of the key financial statements prepared by a company. It shows a company’s financial performance.

The purpose of a P&L is to show the profit (or loss) made by an organisation over a period of time, typically a year. The P&L shows the income generated and various expenses incurred to generate that profit (or loss).

Need to know

The P&L records the financial activities of a business over a period of time. It can be useful to think of the P&L as a video of the business’s journey ...

Get The Finance Book now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.