The Profit & Loss Statement Explained
Also called an income statement, the P&L shows your revenues, costs, and expenses over a specific time period. It tells you whether your business made or lost money.
Key Sections
Sales of products or servicesOther income sourcesDirect costs to produce what you sellMaterials, direct labor, manufacturing costsRevenue minus COGSShows profitability before operating expensesRent, utilities, salaries, marketing, etc.Costs to run the business (not directly tied to products)The bottom lineWhat's left after all expensesWhat to Look For
Gross margin trends: Is your product profitable?Expense ratios: Are operating costs in line?Net profit margin: How much do you keep from each dollar of revenue?Comparison to prior periods: Are you improving?Easy Ledger Services provides monthly P&L statements as part of standard bookkeeping services.