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Learn from India’s Best Professors Learn from India’s Best Professors Profit and Loss Statement Compiled by SuperProfs.com

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Profit and loss statement – financial statement that shows the firm’s revenues and expenses during a specific period. A profit and loss statement summarizes the revenue during a period and subtracts the expenses incurred during the same period to assess the profit or loss of the firm.

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Page 1: Profit and Loss Statement

Learn from India’s Best ProfessorsLearn from India’s Best Professors

Profit and Loss Statement

Compiled by SuperProfs.com

Page 2: Profit and Loss Statement

Learn from India’s Best Professors

What is a Profit and Loss Statement?

Profit and loss statement – financial statement that shows the firm’s revenues and expenses during a specific period.

A profit and loss statement summarizes the revenue during a period and subtracts the expenses incurred during the same period to assess the profit or loss of the firm. 

Page 3: Profit and Loss Statement

Learn from India’s Best Professors

Uses

Creditors and investors can determine the past financial performance of the business and therein predict its future performance.

It can also be used to compare year-on-year expenses.

Basic Equation: Revenues – Expenses = Profit

Page 4: Profit and Loss Statement

Learn from India’s Best Professors

Limitations

Some figures depend on estimatesSome figures depend on accounting

methods used

Page 5: Profit and Loss Statement

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