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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