A financial report summarizing a business's revenue, expenses, and resulting profit or loss over a set period, such as a month, quarter, or year.
A profit and loss statement (P&L, also called an income statement) summarizes your revenue, expenses, and resulting profit over a period — a month, quarter, or year. It answers the fundamental question: did the business make money, and where did it go?
For sellers, the P&L is the report to actually read every month. It shows your revenue at the top, subtracts your business expenses, and lands on net income at the bottom — turning a year of invoices and receipts into one clear story. It’s also what your accountant works from at tax time. For buyers, this is internal, but a pro who can produce a P&L runs a real business, not a hobby.
Unlike a balance sheet, which is a single moment, the P&L covers a span — so comparing this quarter to last is where the insight lives. Rising revenue but flat profit means costs are creeping. Watching the trend is the heart of tracking your numbers.