Definition
Profit and Loss Statement
The profit and loss statement, or income statement, reports a company's revenues, expenses and resulting profit or loss over a period.
The P&L flows from revenue down through operating expenses to EBITDA, EBIT, interest, tax and finally profit after tax. Under Schedule III and Ind AS, Indian companies report it with prescribed line items and an other comprehensive income section for certain gains and losses.
The P&L shows performance over a period, complementing the point-in-time balance sheet. Analysts examine the quality and sustainability of revenue and margins, watching for one-off or exceptional items that can distort the underlying earnings trend.
Related terms
- Balance Sheet (Financial Statement)The balance sheet is a financial statement showing a company's assets, liabilities and shareholders' equity at a point in time, reflecting what it owns and owes.
- Cash Flow StatementThe cash flow statement reconciles a company's profit to its actual cash movements, split into operating, investing and financing activities.
- Profit After Tax (PAT)Profit After Tax is a company's net profit remaining after all expenses, interest and taxes have been deducted, the bottom line of the income statement.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.