What is Profit and Loss Statement (P&L)?
A profit and loss statement is a report of sales, costs and expenses over a period that shows whether the business made a profit or a loss.
Updated
Meaning
English
A profit and loss statement is a report of sales, costs and expenses over a period that shows whether the business made a profit or a loss.
Roman Urdu
Profit and loss statement ek muddat ki sale, cost aur kharchon ki report hai jo batati hai ke karobar ne munafa kamaya ya nuqsan kiya.
Also called P&L, income statement, profit and loss account, nafa nuqsan.
Example
A clinic's P&L for September: fees and pharmacy sales 1,150,000 rupees, medicines sold at cost 380,000, salaries 340,000, rent 150,000, utilities 60,000. Net profit is 220,000 rupees.
How it works
The P&L, also called the income statement, follows a fixed order: sales, minus cost of goods sold, gives gross profit; minus operating expenses gives operating profit; then other income and costs, and tax, give net profit. It covers a period, usually a month or a year, unlike a balance sheet, which shows a single date.
For a small business, the monthly P&L answers the questions owners ask most: did we make money, where did it go, and is this month better than last? Banks and investors also ask for it when a business applies for finance.
In Nafaa
The Nafaa P&L page builds the statement from bills, purchases and expenses for any period, compares it with the previous period or last year, shows it month by month for up to two years and branch by branch, and prints to A4, PDF or thermal paper or exports to CSV.
Related terms
- Net Profit
Net profit is what is left from sales after the cost of goods and all business expenses have been taken off.
- Gross Profit
Gross profit is sales minus the cost of the goods sold, before rent, salaries, bills and other expenses are taken off.
- Cash Flow
Cash flow is the movement of money into and out of a business over a period, which shows whether it has enough cash to pay its bills on time.
- Break-Even Point
The break-even point is the level of sales at which gross profit exactly covers fixed expenses, so the business makes neither profit nor loss.