Description
P&L (Profit and Loss Statement)
Allows to estimate the profitability (profit) of the company. A P&L consists of income and expense parts, with expenses in this financial statement usually having a deeper breakdown by expense item.
If the management report on profits and losses will help to determine those projects (business segments) that generate zero or negative profitability, then the P&L helps to focus on those areas of business that bring real profit. The accrual method is used to generate the report, i.e. obligations that have not yet been paid can be taken into account.
Several profit indicators are used for analysis, the main of which are:
• Marginal profit
• Gross profit
• Operating profit
• EBITDA
• EBIT
• Net profit