Profit and Loss Statement: Format, Example & How to Read It
Written by Aftab Altaf · Published September 18, 2026 · Last updated September 18, 2026 A profit and loss (P&L) statement — also called an income statement — shows whether a business made money or lost money over a specific period. It lists everything the business earned (revenue), everything it spent (expenses), and what's left over (profit or loss). Quick answer: A profit and loss statement = Revenue − Expenses over a set period, usually broken into gross profit, operating profit, profit before tax, and net profit. It helps assess profitability, while the cash flow statement shows how cash is actually moving through the business — the two are related but not the same thing. This guide covers the P&L format, a full worked example using illustrative numbers, the ratios worth tracking, how to read one line by line, and the mistakes beginners most often make. On this page What Is a Profit and Loss Statement? P&L Formula at a Glance Why the P&L ...