What is a profit and loss statement?

A profit and loss (P&L) statement, also called an income statement, summarizes a business's revenues, costs, and expenses over a specific period to show net profit or loss.

Explanation

Lenders review the P&L to evaluate profitability, gross margin, operating margin, and trends over time.

A current P&L (within 30 days) plus 2 years of historical P&Ls is part of nearly every business lending package.

Examples

•Revenue – COGS = Gross profit
•Gross profit – Operating expenses = Operating income
•Operating income – Taxes and interest = Net income

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