Business Training: The Profit and Loss Statement

Money and charts

The profit and loss (P&L) statement, also referred to as the income statement, is a financial statement commonly used by lenders to evaluate your financial condition and prospects for future growth.

You can get your P&L statement from your QuickBooks systems, your bookkeeper, or a small business accounting firm can assist you with your P&L statement preparation.

A P&L statement is important for several reasons. First, it gives you important information regarding revenues and expenses and calculates net income or net losses for a specified time period. The net result could highlight the need to make adjustments to recapture losses or decrease expenses. The P&L statement also illustrates your ability to manage and use your company’s resources. Finally, the P&L statement serves as the record of your business operation that is used to assess taxes on profits earned. It is the only financial statement required by the IRS.

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