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
- 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 left after all expenses, interest and taxes are deducted — the 'bottom line' of the income statement and the figure most headlines and EPS calculations rely on.
- Balance Sheet (Financial Statement)The balance sheet is a financial statement showing what a company owns (assets), owes (liabilities) and what is left over for owners (shareholders' equity) at a single point in time.
Plain-English explainer from Investdesk Investors Encyclopedia. General information, not financial advice.