Profit and Loss Statement

The Profit and Loss Statement summarises how the business has traded over a period.

That is whether it has made a Profit or Loss.

Earlier we defined Profit as the difference between the Revenue (income received) and the Expenses of generating that Revenue.

Net Profit = Revenue - Expenses

The Profit and Loss Statement is, along with the Balance sheet, one of the two main Accounting reports.

 PROFIT AND LOSS STATEMENT FOR Joe Blow
        PERIOD ENDING 01/01/200x

 SALES                          400
 LESS COST OF GOODS SOLD
  OPENING STOCK            50
  PURCHASES               200
  LESS CLOSING STOCK      100   150

 GROSS PROFIT                   250
 LESS OTHER EXPENSES
     Wages                 50
     power                 75
     depreciation          25   150
 NETT PROFIT                    100
                                ===

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