P&L (Profit and Loss Statement)

The Profit and Loss Statement, often called the P&L or Income Statement, shows a company’s financial performance over a specific period — typically monthly, quarterly, or annually.

It summarises income, costs, and expenses to reveal whether the business made a profit or a loss.

The basic structure is:

Revenue – Cost of Sales = Gross Profit

Gross Profit – Operating Expenses = Operating Profit

Operating Profit – Interest & Tax = Net Profit (or Loss)

Example:

If a company earns £500,000 in sales and spends £400,000 on costs and expenses, its net profit is £100,000.

Used in:

Management reporting, tax returns, investor presentations, and loan assessments.