What is Profit and Loss Statement?

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A Profit and Loss Statement is a financial report that summarizes a company's revenues, expenses, and profits over a specific period of time.

It shows the company's total revenue, total expenses, and net income or loss for a specific period, typically a month, quarter, or year.
Revenue includes sales, interest income, and other sources of income, while expenses include costs of goods sold, operating expenses, and taxes.
The net income is calculated by subtracting total expenses from total revenue.
It helps stakeholders assess the financial performance and profitability of a company.
Example: A company's Profit and Loss Statement for the year ended December 31, 2021, shows total revenue of $1,000,000, total expenses of $800,000, and a net income of $200,000.

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