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Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 141 (from laksa078)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa141.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://www.bill.com/learning/profit-loss-statement\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.bill.com/learning/profit-loss-statement\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.bill.com\/learning\/profit-loss-statement","crawl_time":1775978921,"first_indexed_time":1694124187,"http_code":200,"src_unparsed":"com,bill!www,\/learning\/profit-loss-statement s443","src_root_hash":"14008459302550028941","history_drop_reason":null,"meta_title":"Profit and Loss Statement: Definition and Examples of P&L Statements","meta_descriptions":["Learn what is a profit and loss statement (also known as income statement), how to prepare them, and different examples of profit and loss statements."],"attrs_boilerpipe_text":"A profit and loss (P&L) statement details the revenue, expenses, and costs from a specific time period to show net profits. Also called an\nincome statement\n, this financial report spells out whether a business is making a profit or losing money. It can help you understand what helps drive profitability in your business and also reveal potential financial issues.\nAlong with a\nbalance sheet\nand a\ncash flow statement\n, a P&L statement is one of the three primary\nfinancial statements\nused to report on a company’s financial position and results of operations.\nKey takeaways\nA profit and loss statement shows whether a business is making or losing money by tracking revenue and expenses.\nThe statement includes sections like revenue, COGS, gross profit, and operating expenses to detail financial performance.\nThere are different types of P&L statements, including single-step and multi-step, to suit various business needs.\nWhat is a profit and loss statement?\nA profit and loss statement (P&L), often referred as an\nincome statement\n, is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically a quarter or a year. It provides insight into a company's ability to generate profit by comparing income and expenses.\nHow profit and loss statements work\nA profit and loss statement has six essential sections. Here’s how they work:\nRevenue\n. Profit and loss statements typically start with a revenue section, which includes income generated by primary business operations like sales revenue, service fees, and ‌other sources of income.\nCost of goods sold (COGS)\n. If the business sells products, the cost of goods sold section reflects the direct costs associated with production or acquisition. It includes the cost of raw materials, manufacturing expenses, and direct labor costs.\nGross profit\n. You can calculate this by subtracting the cost of goods sold from ‌revenue. It represents profit generated from the core business operations before considering operating expenses.\nOperating expenses\n. This section includes ‌the business expenses incurred from day-to-day operations. It consists of various categories, such as selling expenses, administrative expenses, research and development costs, marketing expenses, and more.\nOperating income\n. Operating income, also known as operating profit, is calculated by subtracting the total operating expenses from the gross profit. It reflects the profitability of the company’s core operations.\nNon-operating items\n. These items are revenues or expenses that aren’t directly related to the primary operations of the business. This may include interest income, interest expenses, gains or losses from investments, income taxes, and other similar items.\nNet income or net loss\n. The final section of the profit and loss statement calculates the net income or net loss of the business. You calculate this figure by subtracting non-operating items from operating income. If the total is positive, it represents the net profit—if negative, it represents a net loss.\nTypes of P&L statements\nThere are two ways to prepare a P&L: the cash accounting method and the accrual method.\nThe\ncash accounting method\nonly looks at the cash that’s been received or paid. This approach is more common with smaller businesses.\nThe\naccrual method\naccounts for money that’s earned, even if it is not yet received. It also tracks expenses that have been accrued but not yet paid.\nExamples of profit and loss statements\nHere’s an\nexample of a P&L statement\n(here called an income statement) for the Kraft Heinz Company. Notice that it includes details such as total revenue, operating expenses, and net income from various sources. While a P&L for a small business will likely look very different, this example still offers useful information about how a successful company formats its statement.\nWhat do P&L statements include?\nA profit and loss statement should include:\nTotal revenue\nCost of goods sold (COGS)\nGross profit\nOperating expenses\nNet profit or loss\nThese are essentially different categories of income and expenses, and when added up will show whether your company is turning a profit or not.\nHow to make a profit and loss statement\nAfter you pick the time frame you want to analyze, here are the steps to follow to create your own P&L statement.\nCalculate total revenue.\nThe amount will differ depending on whether you use the accrual method or the cash accounting method, so make sure you know which system you’re using.\nDetermine the COGS.\nThis includes both the direct and indirect costs of goods sold.\nSubtract COGS from revenue.\nThe resulting amount is your gross profit.\nCalculate expenses.\nLook at everything your company has to pay to stay in business, including rent, advertising costs, and employee salaries. Subtract this amount from gross profit to determine total operating revenue.\nDetermine other income and expenses.\nIf there are taxes, interest, amortization, depreciation, or other revenues and costs not included in the previous calculations, add them in. \nFind the net profit.\nSubtract the total other income and expenses from operating income to find your net profit or loss.\nTry downloading our\nprofit and loss statement template\n. Use the template instructions in the Excel file to get started.\nAutomate your financial operations—demo BILL today\nTypes of P&L statements\nThere are several types of profit and loss statements you can prepare depending on your specific needs and business requirements. Here are some common types:\nSingle-step profit and loss statement.\nThis is the most basic and straightforward type of profit and loss statement. It lists ‌revenues and gains on one side and ‌expenses and losses on the other‌. Subtract the total expenses from the total revenue to calculate the net profit or loss.\nMulti-step profit and loss statement.\nThis type provides more detail by segregating various components of revenue and expenses. It typically includes multiple steps to calculate business profits, operating income, and net income. It allows for a more comprehensive analysis of the company’s financial performance.\nVertical profit and loss statement.\nA vertical profit and loss statement presents financial data in a vertical format, with each line item representing a specific category of revenue or expense. It provides a clear breakdown of different income and expense streams, making it easier to analyze and compare figures.\nHorizontal profit and loss statement.\nA horizontal profit and loss statement presents financial data in a horizontal format, typically comparing figures across multiple periods. This type allows for easy comparison of revenue and expense trends over time, highlighting the changes in financial performance from one period to another.\nContribution margin income statement.\nThis statement focuses on the contribution margin, which represents the amount of revenue remaining after deducting only the variable costs associated with producing goods or delivering services. It helps in assessing the profitability of individual products or services.\nPro forma profit and loss statement.\nA pro forma profit and loss statement is a projected or forecasted statement that estimates future revenues, costs, and expenses. It’s often used for budgeting, business planning, and aiming to predict future business performance.\nSingle-step vs. multi-step P&L statements\nA profit and loss statement can be either single-step or multi-step. To understand what that means, we have to step back a little. Every publicly traded company is required to use Generally Accepted Accounting Principles (GAAP) created by the Financial Accounting Standards Board (\nFASB\n), and many private companies choose to comply with GAAP as well. GAAP outlines options for either single-step or multi-step P&L statements.\nA single-step P&L is pretty simple: it shows revenue, expenses, and net income. It makes for easier record-keeping, but it may also lack important information that might be useful for your business. This method is more popular with P&L statements than income statements.\nA multi-step P&L is more common with larger, publicly traded companies. In addition to tracking revenue, expenses, and net income, it categorizes expenses as either direct costs or indirect costs. This means the document includes a gross profit calculation and an operating income calculation, which can offer a clearer picture of how a business is run. Multi-step processes are more common in income statements than P&L statements.\nProfit and loss statement vs. other financial statements\nIf you'd like to know how profit and loss statements stack up against other important financial statements in outlining a company's financial health, this section walks you through what you need to know.\nP&L statements vs income statements\nActually, these are two different names for the same thing. Companies generate revenue and pay out expenses (both operating and non-operating expenses) to end up with net earnings. So, both terms refer to the financial report that shows a company's revenue, expenses, and resulting profit or loss over a specific period.\nGenerally, these reports start with gross revenue, deduct non-tax expenses to show the gross profit margin, then deduct income tax expense to show the net profit margin.\nOther names for the same report include:\nP&L statement\nIncome statement\nOperating statement\nEarnings statement\nProfit and loss report\nProfit and loss account\nP&L statements vs cash flow statements\nA profit and loss statement shows you how much profit a company has made over a given reporting period, starting with revenue over the given period and subtracting overhead costs and other expenses over the same period to calculate the company's profitability.\nA cash flow statement, on the other hand, is a financial document that shows how much cash has flowed in and out of the company during that particular period. While they sound similar, especially if the profit and loss statement template uses the cash method, there are still a few differences between them. Cash for office supplies might be both an expense and a cash outflow in a given fiscal year, but partner distributions are different—they're not expenses, but they are cash outlays.\nP&L statements vs. balance sheets\nBoth documents are important to your business for different reasons, and they cover different aspects of company finances.\nWhile a profit and loss statement shows income and expenses over a certain period, a balance sheet offers information about a company’s assets, liabilities (business debt), and stockholder equity at a specific point in time.\nA balance sheet offers greater insight into the\nliquidity\nof a company’s finances, while a P&L is more focused on overall financial results.\nWhy P&L statements matter\nPotential investors will want to check out your P&L statements to understand if your company is spending money wisely. And for the sake of transparency, all publicly traded companies are required to release a P&L statement every year.\nBut even if these factors don’t apply to your organization, a P&L statement provides important insight into the financial health of your business. Business owners should be familiar with their P&Ls so they can make smarter day-to-day decisions and improve future business performance. Knowing where your money is going can help you take your company in the right direction.\nUnderstanding your company’s financial situation\nWant to improve your company's financial health? Take control of your cash flow with BILL Accounts Payable, BILL Accounts Receivable, and BILL Spend & Expense.\nAutomate receivables\nand get paid 2x faster\nAutomate payables\nto optimize early discounts, avoid late fees\nAutomate expenses\nfor maximum control over your budgets\nBILL also helps your accounting and finance team improve your security and reduce the chance of fraud. 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Your submission has been received\\!\n\nOops! Something went wrong while submitting the form.\n\nBy continuing, you agree to BILL's [Terms of Service](https:\/\/www.bill.com\/legal\/terms-of-service) and [Privacy Notice](https:\/\/www.bill.com\/privacy).\n\nA profit and loss (P\\&L) statement details the revenue, expenses, and costs from a specific time period to show net profits. Also called an [income statement](https:\/\/www.bill.com\/learning\/income-statement), this financial report spells out whether a business is making a profit or losing money. It can help you understand what helps drive profitability in your business and also reveal potential financial issues.\n\nAlong with a [balance sheet](https:\/\/www.bill.com\/learning\/balance-sheet) and a [cash flow statement](https:\/\/www.bill.com\/learning\/cash-flow-statements), a P\\&L statement is one of the three primary [financial statements](https:\/\/www.bill.com\/learning\/financial-statements) used to report on a company’s financial position and results of operations.\n\n### Key takeaways\nA profit and loss statement shows whether a business is making or losing money by tracking revenue and expenses.\n\nThe statement includes sections like revenue, COGS, gross profit, and operating expenses to detail financial performance.\n\nThere are different types of P\\&L statements, including single-step and multi-step, to suit various business needs.\n## What is a profit and loss statement?\nA profit and loss statement (P\\&L), often referred as an [income statement](https:\/\/www.bill.com\/learning\/income-statement), is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically a quarter or a year. It provides insight into a company's ability to generate profit by comparing income and expenses.\n\n![What is a profit and loss statement](https:\/\/cdn.prod.website-files.com\/63e56114746188c54e2936e0\/6760543f45d4d5930326e48f_6760540ca20f708a073ffd23_Profit%2526LossStatement_BILLP%2526LManagement.png)\n\n## How profit and loss statements work\nA profit and loss statement has six essential sections. Here’s how they work:\n\n1. **Revenue**. Profit and loss statements typically start with a revenue section, which includes income generated by primary business operations like sales revenue, service fees, and ‌other sources of income.\n2. **Cost of goods sold (COGS)**. If the business sells products, the cost of goods sold section reflects the direct costs associated with production or acquisition. It includes the cost of raw materials, manufacturing expenses, and direct labor costs.\n3. **Gross profit**. You can calculate this by subtracting the cost of goods sold from ‌revenue. It represents profit generated from the core business operations before considering operating expenses.\n4. **Operating expenses**. This section includes ‌the business expenses incurred from day-to-day operations. It consists of various categories, such as selling expenses, administrative expenses, research and development costs, marketing expenses, and more.\n5. **Operating income**. Operating income, also known as operating profit, is calculated by subtracting the total operating expenses from the gross profit. It reflects the profitability of the company’s core operations.\n6. **Non-operating items**. These items are revenues or expenses that aren’t directly related to the primary operations of the business. This may include interest income, interest expenses, gains or losses from investments, income taxes, and other similar items.\n7. **Net income or net loss**. The final section of the profit and loss statement calculates the net income or net loss of the business. You calculate this figure by subtracting non-operating items from operating income. If the total is positive, it represents the net profit—if negative, it represents a net loss.\n## Types of P\\&L statements\nThere are two ways to prepare a P\\&L: the cash accounting method and the accrual method.\n\nThe [**cash accounting method**](https:\/\/www.bill.com\/learning\/cash-basis-accounting) only looks at the cash that’s been received or paid. This approach is more common with smaller businesses.\n\nThe **accrual method** accounts for money that’s earned, even if it is not yet received. It also tracks expenses that have been accrued but not yet paid.\n\n## Examples of profit and loss statements\nHere’s an [example of a P\\&L statement](https:\/\/finance.yahoo.com\/quote\/KHC\/financials\/?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALGgDWc3Zj_h6YGXR8sBwawZDpr1CJ9kBAteBHMHXMjlUZqkU-CuhD4Yy6wQ7t1w2Cd-zs8I9PQu1WqzZhn3fjYzw5tmfsjBseqdfMQ8rjUvVGpyBmbrCBhk-GRDvs5WL1LPnv_DBzRIcd-_5wJea_ZPALrnLK9kO6R10Yz7KCHP&_guc_consent_skip=1689785353#nofollow) (here called an income statement) for the Kraft Heinz Company. Notice that it includes details such as total revenue, operating expenses, and net income from various sources. While a P\\&L for a small business will likely look very different, this example still offers useful information about how a successful company formats its statement.\n\n## What do P\\&L statements include?\nA profit and loss statement should include:\n\n- Total revenue\n- Cost of goods sold (COGS)\n- Gross profit\n- Operating expenses\n- Net profit or loss\n\nThese are essentially different categories of income and expenses, and when added up will show whether your company is turning a profit or not.\n\n## How to make a profit and loss statement\nAfter you pick the time frame you want to analyze, here are the steps to follow to create your own P\\&L statement.\n\n1. **Calculate total revenue.** The amount will differ depending on whether you use the accrual method or the cash accounting method, so make sure you know which system you’re using.\n2. **Determine the COGS.** This includes both the direct and indirect costs of goods sold.\n3. **Subtract COGS from revenue.** The resulting amount is your gross profit.\n4. **Calculate expenses.** Look at everything your company has to pay to stay in business, including rent, advertising costs, and employee salaries. Subtract this amount from gross profit to determine total operating revenue.\n5. **Determine other income and expenses.** If there are taxes, interest, amortization, depreciation, or other revenues and costs not included in the previous calculations, add them in.\n6. **Find the net profit.** Subtract the total other income and expenses from operating income to find your net profit or loss.\n\n*Try downloading our* [*profit and loss statement template*](https:\/\/www.bill.com\/business-templates\/profit-loss-statement)*. Use the template instructions in the Excel file to get started.*\n\nAutomate your financial operations—demo BILL today\n\n[Demo](https:\/\/www.bill.com\/demo-request)\n## Types of P\\&L statements\nThere are several types of profit and loss statements you can prepare depending on your specific needs and business requirements. Here are some common types:\n\n1. **Single-step profit and loss statement.** This is the most basic and straightforward type of profit and loss statement. It lists ‌revenues and gains on one side and ‌expenses and losses on the other‌. Subtract the total expenses from the total revenue to calculate the net profit or loss.\n2. **Multi-step profit and loss statement.** This type provides more detail by segregating various components of revenue and expenses. It typically includes multiple steps to calculate business profits, operating income, and net income. It allows for a more comprehensive analysis of the company’s financial performance.\n3. **Vertical profit and loss statement.** A vertical profit and loss statement presents financial data in a vertical format, with each line item representing a specific category of revenue or expense. It provides a clear breakdown of different income and expense streams, making it easier to analyze and compare figures.\n4. **Horizontal profit and loss statement.** A horizontal profit and loss statement presents financial data in a horizontal format, typically comparing figures across multiple periods. This type allows for easy comparison of revenue and expense trends over time, highlighting the changes in financial performance from one period to another.\n5. **Contribution margin income statement.** This statement focuses on the contribution margin, which represents the amount of revenue remaining after deducting only the variable costs associated with producing goods or delivering services. It helps in assessing the profitability of individual products or services.\n6. **Pro forma profit and loss statement.** A pro forma profit and loss statement is a projected or forecasted statement that estimates future revenues, costs, and expenses. It’s often used for budgeting, business planning, and aiming to predict future business performance.\n### Single-step vs. multi-step P\\&L statements\nA profit and loss statement can be either single-step or multi-step. To understand what that means, we have to step back a little. Every publicly traded company is required to use Generally Accepted Accounting Principles (GAAP) created by the Financial Accounting Standards Board ([FASB](https:\/\/www.fasb.org\/#nofollow)), and many private companies choose to comply with GAAP as well. GAAP outlines options for either single-step or multi-step P\\&L statements.\n\nA single-step P\\&L is pretty simple: it shows revenue, expenses, and net income. It makes for easier record-keeping, but it may also lack important information that might be useful for your business. This method is more popular with P\\&L statements than income statements.\n\nA multi-step P\\&L is more common with larger, publicly traded companies. In addition to tracking revenue, expenses, and net income, it categorizes expenses as either direct costs or indirect costs. This means the document includes a gross profit calculation and an operating income calculation, which can offer a clearer picture of how a business is run. Multi-step processes are more common in income statements than P\\&L statements.\n\n![Other names for profit and loss (P\\&L) statements](https:\/\/cdn.prod.website-files.com\/63e56114746188c54e2936e0\/68012a46e5b1f1cee82f83d3_OtherNamesforP%26LStatements_ProfitLossStatement.webp)\n\n## **Profit and loss statement vs. other financial statements**\nIf you'd like to know how profit and loss statements stack up against other important financial statements in outlining a company's financial health, this section walks you through what you need to know.\n\n### **P\\&L statements vs income statements**\nActually, these are two different names for the same thing. Companies generate revenue and pay out expenses (both operating and non-operating expenses) to end up with net earnings. So, both terms refer to the financial report that shows a company's revenue, expenses, and resulting profit or loss over a specific period.\n\nGenerally, these reports start with gross revenue, deduct non-tax expenses to show the gross profit margin, then deduct income tax expense to show the net profit margin.\n\nOther names for the same report include:\n\n- P\\&L statement\n- Income statement\n- Operating statement\n- Earnings statement\n- Profit and loss report\n- Profit and loss account\n### **P\\&L statements vs cash flow statements**\nA profit and loss statement shows you how much profit a company has made over a given reporting period, starting with revenue over the given period and subtracting overhead costs and other expenses over the same period to calculate the company's profitability.\n\nA cash flow statement, on the other hand, is a financial document that shows how much cash has flowed in and out of the company during that particular period. While they sound similar, especially if the profit and loss statement template uses the cash method, there are still a few differences between them. Cash for office supplies might be both an expense and a cash outflow in a given fiscal year, but partner distributions are different—they're not expenses, but they are cash outlays.\n\n### P\\&L statements vs. balance sheets\nBoth documents are important to your business for different reasons, and they cover different aspects of company finances.\n\nWhile a profit and loss statement shows income and expenses over a certain period, a balance sheet offers information about a company’s assets, liabilities (business debt), and stockholder equity at a specific point in time.\n\nA balance sheet offers greater insight into the [liquidity](https:\/\/www.bill.com\/blog\/liquid-assets) of a company’s finances, while a P\\&L is more focused on overall financial results.\n\n## Why P\\&L statements matter\nPotential investors will want to check out your P\\&L statements to understand if your company is spending money wisely. And for the sake of transparency, all publicly traded companies are required to release a P\\&L statement every year.\n\nBut even if these factors don’t apply to your organization, a P\\&L statement provides important insight into the financial health of your business. Business owners should be familiar with their P\\&Ls so they can make smarter day-to-day decisions and improve future business performance. Knowing where your money is going can help you take your company in the right direction.\n\n## Understanding your company’s financial situation\nWant to improve your company's financial health? Take control of your cash flow with BILL Accounts Payable, BILL Accounts Receivable, and BILL Spend & Expense.\n\n- [Automate receivables](https:\/\/www.bill.com\/product\/accounts-receivable) and get paid 2x faster\n- [Automate payables](https:\/\/www.bill.com\/product\/accounts-payable) to optimize early discounts, avoid late fees\n- [Automate expenses](https:\/\/www.bill.com\/product\/spend-and-expense) for maximum control over your budgets\n\nBILL also helps your accounting and finance team improve your security and reduce the chance of fraud. It even syncs with most popular accounting software options, giving you valuable insights with books that stay up to date.\n\nSee what BILL can do for your business.\n\nStart using BILL today.\n\n[Sign up](https:\/\/www.bill.com\/signup)\n\nAuthor\n\nEmily Taylor\n\nContributing writer, BILL\n\nWith a background in finance and over a decade of experience in business writing, Emily simplifies complex finance topics to help businesses streamline operations, manage cash flow, and make smarter financial decisions.\n\nAuthor\n\n![](https:\/\/cdn.prod.website-files.com\/63e3da3df35cd62f54751985\/675a098b3a49e5517af4e001_author-placehold.png)\n\nEmily Taylor\n\nContributing writer, BILL\n\nWith a background in finance and over a decade of experience in business writing, Emily simplifies complex finance topics to help businesses streamline operations, manage cash flow, and make smarter financial decisions.\n\nGet more from BILL\n\nSubscribe to finance insights and thought leadership content delivered straight to your inbox.\n\nThank you! 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Definition & why business need it](https:\/\/www.bill.com\/learning\/cloud-accounting)\n\n- [Profit forecasting: What it is and why it matters](https:\/\/www.bill.com\/learning\/profit-forecasting)\n\n- [Accounting ledgers: What are accounting ledgers & examples](https:\/\/www.bill.com\/learning\/accounting-ledger)\n\n![Dashboard mockup](https:\/\/cdn.prod.website-files.com\/63e56114746188c54e2936e0\/648d3933ee8c1be65b5b93d4_BLOG-Accounting-Gray.png)\n\n*BILL and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on, for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. BILL assumes no responsibility for any inaccuracies or inconsistencies in the content. 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AR](https:\/\/www.bill.com\/privacy)\n\n[Spend & Expense](https:\/\/www.bill.com\/privacy)\n\nAP & AR:\n\n[Terms of Service](https:\/\/www.bill.com\/legal\/terms-of-service)\n\n[Privacy Notice](https:\/\/www.bill.com\/privacy)\n\nSpend & Expense:\n\n[Terms of Service](https:\/\/www.bill.com\/legal\/spend-expense-terms-of-service)\n\n[Privacy Notice](https:\/\/www.bill.com\/privacy)\n\n[Legal](https:\/\/www.bill.com\/legal)\n\n[Licenses and Authorizations](https:\/\/www.bill.com\/legal\/authorizations)\n\n[Acceptable Use Policy](https:\/\/www.bill.com\/legal\/acceptable-use-policy)\n\n[Website Terms of Use](https:\/\/www.bill.com\/legal\/website-terms-of-use)\n\n[BILL Network Rules](https:\/\/www.bill.com\/legal\/network-rules)\n\n[Accessibility Statement](https:\/\/www.bill.com\/legal\/accessibility-statement)\n\n[Do Not Sell or Share My Personal Information](https:\/\/www.bill.com\/privacy\/do-not-sell-my-personal-information)\n\nBILL occasionally uses AI-generated images in marketing materials for illustrative purposes only.  \nBILL AP\/AR services are provided by Bill.com LLC; Spend & Expense services are provided by Divvy Pay LLC; The BILL Divvy Card may be issued by one of Divvy Pay, LLC's [bank partners](https:\/\/www.bill.com\/legal\/bank-partners). The BILL Divvy Card is not a deposit product. For your specific lender, see your Card Agreement.  \n©2026 BILL Operations, LLC. BILL, the BILL logo, and the “b” logo are trademarks of BILL Operations, LLC. All other company names and brands are the property of their respective owners.\n\n![](https:\/\/www.facebook.com\/tr?id=1573846969639746&ev=PageView&noscript=1)\n\n![](https:\/\/trkn.us\/pixel\/conv\/ppt=22737;g=site-wide;gid=53627;ord=[uniqueid]height=\"0\")\n\n![](https:\/\/www.facebook.com\/tr?id=1543798229207252&ev=PageView&noscript=1)\n\n![](https:\/\/tvspix.com\/t.png?&t=1775978923212&l=tvscientific-pix-o-be54247c-98fd-48ad-b071-6335e3cc298d&u3=https%3A%2F%2Fwww.bill.com%2Flearning%2Fprofit-loss-statement&u11=tvspix-v2&eid=75f1b2c1-c6ec-4338-bdfb-82551ad6204d)","attrs_readable_markdown":"A profit and loss (P\\&L) statement details the revenue, expenses, and costs from a specific time period to show net profits. Also called an [income statement](https:\/\/www.bill.com\/learning\/income-statement), this financial report spells out whether a business is making a profit or losing money. It can help you understand what helps drive profitability in your business and also reveal potential financial issues.\n\nAlong with a [balance sheet](https:\/\/www.bill.com\/learning\/balance-sheet) and a [cash flow statement](https:\/\/www.bill.com\/learning\/cash-flow-statements), a P\\&L statement is one of the three primary [financial statements](https:\/\/www.bill.com\/learning\/financial-statements) used to report on a company’s financial position and results of operations.\n\n### Key takeaways\nA profit and loss statement shows whether a business is making or losing money by tracking revenue and expenses.\n\nThe statement includes sections like revenue, COGS, gross profit, and operating expenses to detail financial performance.\n\nThere are different types of P\\&L statements, including single-step and multi-step, to suit various business needs.\n## What is a profit and loss statement?\nA profit and loss statement (P\\&L), often referred as an [income statement](https:\/\/www.bill.com\/learning\/income-statement), is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically a quarter or a year. It provides insight into a company's ability to generate profit by comparing income and expenses.\n\n![What is a profit and loss statement](https:\/\/cdn.prod.website-files.com\/63e56114746188c54e2936e0\/6760543f45d4d5930326e48f_6760540ca20f708a073ffd23_Profit%2526LossStatement_BILLP%2526LManagement.png)\n\n## How profit and loss statements work\nA profit and loss statement has six essential sections. Here’s how they work:\n\n1. **Revenue**. Profit and loss statements typically start with a revenue section, which includes income generated by primary business operations like sales revenue, service fees, and ‌other sources of income.\n2. **Cost of goods sold (COGS)**. If the business sells products, the cost of goods sold section reflects the direct costs associated with production or acquisition. It includes the cost of raw materials, manufacturing expenses, and direct labor costs.\n3. **Gross profit**. You can calculate this by subtracting the cost of goods sold from ‌revenue. It represents profit generated from the core business operations before considering operating expenses.\n4. **Operating expenses**. This section includes ‌the business expenses incurred from day-to-day operations. It consists of various categories, such as selling expenses, administrative expenses, research and development costs, marketing expenses, and more.\n5. **Operating income**. Operating income, also known as operating profit, is calculated by subtracting the total operating expenses from the gross profit. It reflects the profitability of the company’s core operations.\n6. **Non-operating items**. These items are revenues or expenses that aren’t directly related to the primary operations of the business. This may include interest income, interest expenses, gains or losses from investments, income taxes, and other similar items.\n7. **Net income or net loss**. The final section of the profit and loss statement calculates the net income or net loss of the business. You calculate this figure by subtracting non-operating items from operating income. If the total is positive, it represents the net profit—if negative, it represents a net loss.\n## Types of P\\&L statements\nThere are two ways to prepare a P\\&L: the cash accounting method and the accrual method.\n\nThe [**cash accounting method**](https:\/\/www.bill.com\/learning\/cash-basis-accounting) only looks at the cash that’s been received or paid. This approach is more common with smaller businesses.\n\nThe **accrual method** accounts for money that’s earned, even if it is not yet received. It also tracks expenses that have been accrued but not yet paid.\n\n## Examples of profit and loss statements\nHere’s an [example of a P\\&L statement](https:\/\/finance.yahoo.com\/quote\/KHC\/financials\/?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALGgDWc3Zj_h6YGXR8sBwawZDpr1CJ9kBAteBHMHXMjlUZqkU-CuhD4Yy6wQ7t1w2Cd-zs8I9PQu1WqzZhn3fjYzw5tmfsjBseqdfMQ8rjUvVGpyBmbrCBhk-GRDvs5WL1LPnv_DBzRIcd-_5wJea_ZPALrnLK9kO6R10Yz7KCHP&_guc_consent_skip=1689785353#nofollow) (here called an income statement) for the Kraft Heinz Company. Notice that it includes details such as total revenue, operating expenses, and net income from various sources. While a P\\&L for a small business will likely look very different, this example still offers useful information about how a successful company formats its statement.\n\n## What do P\\&L statements include?\nA profit and loss statement should include:\n\n- Total revenue\n- Cost of goods sold (COGS)\n- Gross profit\n- Operating expenses\n- Net profit or loss\n\nThese are essentially different categories of income and expenses, and when added up will show whether your company is turning a profit or not.\n\n## How to make a profit and loss statement\nAfter you pick the time frame you want to analyze, here are the steps to follow to create your own P\\&L statement.\n\n1. **Calculate total revenue.** The amount will differ depending on whether you use the accrual method or the cash accounting method, so make sure you know which system you’re using.\n2. **Determine the COGS.** This includes both the direct and indirect costs of goods sold.\n3. **Subtract COGS from revenue.** The resulting amount is your gross profit.\n4. **Calculate expenses.** Look at everything your company has to pay to stay in business, including rent, advertising costs, and employee salaries. Subtract this amount from gross profit to determine total operating revenue.\n5. **Determine other income and expenses.** If there are taxes, interest, amortization, depreciation, or other revenues and costs not included in the previous calculations, add them in.\n6. **Find the net profit.** Subtract the total other income and expenses from operating income to find your net profit or loss.\n\n*Try downloading our* [*profit and loss statement template*](https:\/\/www.bill.com\/business-templates\/profit-loss-statement)*. Use the template instructions in the Excel file to get started.*\n\nAutomate your financial operations—demo BILL today\n\n## Types of P\\&L statements\nThere are several types of profit and loss statements you can prepare depending on your specific needs and business requirements. Here are some common types:\n\n1. **Single-step profit and loss statement.** This is the most basic and straightforward type of profit and loss statement. It lists ‌revenues and gains on one side and ‌expenses and losses on the other‌. Subtract the total expenses from the total revenue to calculate the net profit or loss.\n2. **Multi-step profit and loss statement.** This type provides more detail by segregating various components of revenue and expenses. It typically includes multiple steps to calculate business profits, operating income, and net income. It allows for a more comprehensive analysis of the company’s financial performance.\n3. **Vertical profit and loss statement.** A vertical profit and loss statement presents financial data in a vertical format, with each line item representing a specific category of revenue or expense. It provides a clear breakdown of different income and expense streams, making it easier to analyze and compare figures.\n4. **Horizontal profit and loss statement.** A horizontal profit and loss statement presents financial data in a horizontal format, typically comparing figures across multiple periods. This type allows for easy comparison of revenue and expense trends over time, highlighting the changes in financial performance from one period to another.\n5. **Contribution margin income statement.** This statement focuses on the contribution margin, which represents the amount of revenue remaining after deducting only the variable costs associated with producing goods or delivering services. It helps in assessing the profitability of individual products or services.\n6. **Pro forma profit and loss statement.** A pro forma profit and loss statement is a projected or forecasted statement that estimates future revenues, costs, and expenses. It’s often used for budgeting, business planning, and aiming to predict future business performance.\n### Single-step vs. multi-step P\\&L statements\nA profit and loss statement can be either single-step or multi-step. To understand what that means, we have to step back a little. Every publicly traded company is required to use Generally Accepted Accounting Principles (GAAP) created by the Financial Accounting Standards Board ([FASB](https:\/\/www.fasb.org\/#nofollow)), and many private companies choose to comply with GAAP as well. GAAP outlines options for either single-step or multi-step P\\&L statements.\n\nA single-step P\\&L is pretty simple: it shows revenue, expenses, and net income. It makes for easier record-keeping, but it may also lack important information that might be useful for your business. This method is more popular with P\\&L statements than income statements.\n\nA multi-step P\\&L is more common with larger, publicly traded companies. In addition to tracking revenue, expenses, and net income, it categorizes expenses as either direct costs or indirect costs. This means the document includes a gross profit calculation and an operating income calculation, which can offer a clearer picture of how a business is run. Multi-step processes are more common in income statements than P\\&L statements.\n\n![Other names for profit and loss (P\\&L) statements](https:\/\/cdn.prod.website-files.com\/63e56114746188c54e2936e0\/68012a46e5b1f1cee82f83d3_OtherNamesforP%26LStatements_ProfitLossStatement.webp)\n\n## **Profit and loss statement vs. other financial statements**\nIf you'd like to know how profit and loss statements stack up against other important financial statements in outlining a company's financial health, this section walks you through what you need to know.\n\n### **P\\&L statements vs income statements**\nActually, these are two different names for the same thing. Companies generate revenue and pay out expenses (both operating and non-operating expenses) to end up with net earnings. So, both terms refer to the financial report that shows a company's revenue, expenses, and resulting profit or loss over a specific period.\n\nGenerally, these reports start with gross revenue, deduct non-tax expenses to show the gross profit margin, then deduct income tax expense to show the net profit margin.\n\nOther names for the same report include:\n\n- P\\&L statement\n- Income statement\n- Operating statement\n- Earnings statement\n- Profit and loss report\n- Profit and loss account\n### **P\\&L statements vs cash flow statements**\nA profit and loss statement shows you how much profit a company has made over a given reporting period, starting with revenue over the given period and subtracting overhead costs and other expenses over the same period to calculate the company's profitability.\n\nA cash flow statement, on the other hand, is a financial document that shows how much cash has flowed in and out of the company during that particular period. While they sound similar, especially if the profit and loss statement template uses the cash method, there are still a few differences between them. Cash for office supplies might be both an expense and a cash outflow in a given fiscal year, but partner distributions are different—they're not expenses, but they are cash outlays.\n\n### P\\&L statements vs. balance sheets\nBoth documents are important to your business for different reasons, and they cover different aspects of company finances.\n\nWhile a profit and loss statement shows income and expenses over a certain period, a balance sheet offers information about a company’s assets, liabilities (business debt), and stockholder equity at a specific point in time.\n\nA balance sheet offers greater insight into the [liquidity](https:\/\/www.bill.com\/blog\/liquid-assets) of a company’s finances, while a P\\&L is more focused on overall financial results.\n\n## Why P\\&L statements matter\nPotential investors will want to check out your P\\&L statements to understand if your company is spending money wisely. And for the sake of transparency, all publicly traded companies are required to release a P\\&L statement every year.\n\nBut even if these factors don’t apply to your organization, a P\\&L statement provides important insight into the financial health of your business. Business owners should be familiar with their P\\&Ls so they can make smarter day-to-day decisions and improve future business performance. Knowing where your money is going can help you take your company in the right direction.\n\n## Understanding your company’s financial situation\nWant to improve your company's financial health? Take control of your cash flow with BILL Accounts Payable, BILL Accounts Receivable, and BILL Spend & Expense.\n\n- [Automate receivables](https:\/\/www.bill.com\/product\/accounts-receivable) and get paid 2x faster\n- [Automate payables](https:\/\/www.bill.com\/product\/accounts-payable) to optimize early discounts, avoid late fees\n- [Automate expenses](https:\/\/www.bill.com\/product\/spend-and-expense) for maximum control over your budgets\n\nBILL also helps your accounting and finance team improve your security and reduce the chance of fraud. It even syncs with most popular accounting software options, giving you valuable insights with books that stay up to date.\n\nSee what BILL can do for your business.\n\nStart using BILL today.","meta_canonical":null}

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Boilerpipe Text	A profit and loss (P&L) statement details the revenue, expenses, and costs from a specific time period to show net profits. Also called an income statement , this financial report spells out whether a business is making a profit or losing money. It can help you understand what helps drive profitability in your business and also reveal potential financial issues. Along with a balance sheet and a cash flow statement , a P&L statement is one of the three primary financial statements used to report on a company’s financial position and results of operations. Key takeaways A profit and loss statement shows whether a business is making or losing money by tracking revenue and expenses. The statement includes sections like revenue, COGS, gross profit, and operating expenses to detail financial performance. There are different types of P&L statements, including single-step and multi-step, to suit various business needs. What is a profit and loss statement? A profit and loss statement (P&L), often referred as an income statement , is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically a quarter or a year. It provides insight into a company's ability to generate profit by comparing income and expenses. How profit and loss statements work A profit and loss statement has six essential sections. Here’s how they work: Revenue . Profit and loss statements typically start with a revenue section, which includes income generated by primary business operations like sales revenue, service fees, and ‌other sources of income. Cost of goods sold (COGS) . If the business sells products, the cost of goods sold section reflects the direct costs associated with production or acquisition. It includes the cost of raw materials, manufacturing expenses, and direct labor costs. Gross profit . You can calculate this by subtracting the cost of goods sold from ‌revenue. It represents profit generated from the core business operations before considering operating expenses. Operating expenses . This section includes ‌the business expenses incurred from day-to-day operations. It consists of various categories, such as selling expenses, administrative expenses, research and development costs, marketing expenses, and more. Operating income . Operating income, also known as operating profit, is calculated by subtracting the total operating expenses from the gross profit. It reflects the profitability of the company’s core operations. Non-operating items . These items are revenues or expenses that aren’t directly related to the primary operations of the business. This may include interest income, interest expenses, gains or losses from investments, income taxes, and other similar items. Net income or net loss . The final section of the profit and loss statement calculates the net income or net loss of the business. You calculate this figure by subtracting non-operating items from operating income. If the total is positive, it represents the net profit—if negative, it represents a net loss. Types of P&L statements There are two ways to prepare a P&L: the cash accounting method and the accrual method. The cash accounting method only looks at the cash that’s been received or paid. This approach is more common with smaller businesses. The accrual method accounts for money that’s earned, even if it is not yet received. It also tracks expenses that have been accrued but not yet paid. Examples of profit and loss statements Here’s an example of a P&L statement (here called an income statement) for the Kraft Heinz Company. Notice that it includes details such as total revenue, operating expenses, and net income from various sources. While a P&L for a small business will likely look very different, this example still offers useful information about how a successful company formats its statement. What do P&L statements include? A profit and loss statement should include: Total revenue Cost of goods sold (COGS) Gross profit Operating expenses Net profit or loss These are essentially different categories of income and expenses, and when added up will show whether your company is turning a profit or not. How to make a profit and loss statement After you pick the time frame you want to analyze, here are the steps to follow to create your own P&L statement. Calculate total revenue. The amount will differ depending on whether you use the accrual method or the cash accounting method, so make sure you know which system you’re using. Determine the COGS. This includes both the direct and indirect costs of goods sold. Subtract COGS from revenue. The resulting amount is your gross profit. Calculate expenses. Look at everything your company has to pay to stay in business, including rent, advertising costs, and employee salaries. Subtract this amount from gross profit to determine total operating revenue. Determine other income and expenses. If there are taxes, interest, amortization, depreciation, or other revenues and costs not included in the previous calculations, add them in. Find the net profit. Subtract the total other income and expenses from operating income to find your net profit or loss. Try downloading our profit and loss statement template . Use the template instructions in the Excel file to get started. Automate your financial operations—demo BILL today Types of P&L statements There are several types of profit and loss statements you can prepare depending on your specific needs and business requirements. Here are some common types: Single-step profit and loss statement. This is the most basic and straightforward type of profit and loss statement. It lists ‌revenues and gains on one side and ‌expenses and losses on the other‌. Subtract the total expenses from the total revenue to calculate the net profit or loss. Multi-step profit and loss statement. This type provides more detail by segregating various components of revenue and expenses. It typically includes multiple steps to calculate business profits, operating income, and net income. It allows for a more comprehensive analysis of the company’s financial performance. Vertical profit and loss statement. A vertical profit and loss statement presents financial data in a vertical format, with each line item representing a specific category of revenue or expense. It provides a clear breakdown of different income and expense streams, making it easier to analyze and compare figures. Horizontal profit and loss statement. A horizontal profit and loss statement presents financial data in a horizontal format, typically comparing figures across multiple periods. This type allows for easy comparison of revenue and expense trends over time, highlighting the changes in financial performance from one period to another. Contribution margin income statement. This statement focuses on the contribution margin, which represents the amount of revenue remaining after deducting only the variable costs associated with producing goods or delivering services. It helps in assessing the profitability of individual products or services. Pro forma profit and loss statement. A pro forma profit and loss statement is a projected or forecasted statement that estimates future revenues, costs, and expenses. It’s often used for budgeting, business planning, and aiming to predict future business performance. Single-step vs. multi-step P&L statements A profit and loss statement can be either single-step or multi-step. To understand what that means, we have to step back a little. Every publicly traded company is required to use Generally Accepted Accounting Principles (GAAP) created by the Financial Accounting Standards Board ( FASB ), and many private companies choose to comply with GAAP as well. GAAP outlines options for either single-step or multi-step P&L statements. A single-step P&L is pretty simple: it shows revenue, expenses, and net income. It makes for easier record-keeping, but it may also lack important information that might be useful for your business. This method is more popular with P&L statements than income statements. A multi-step P&L is more common with larger, publicly traded companies. In addition to tracking revenue, expenses, and net income, it categorizes expenses as either direct costs or indirect costs. This means the document includes a gross profit calculation and an operating income calculation, which can offer a clearer picture of how a business is run. Multi-step processes are more common in income statements than P&L statements. Profit and loss statement vs. other financial statements If you'd like to know how profit and loss statements stack up against other important financial statements in outlining a company's financial health, this section walks you through what you need to know. P&L statements vs income statements Actually, these are two different names for the same thing. Companies generate revenue and pay out expenses (both operating and non-operating expenses) to end up with net earnings. So, both terms refer to the financial report that shows a company's revenue, expenses, and resulting profit or loss over a specific period. Generally, these reports start with gross revenue, deduct non-tax expenses to show the gross profit margin, then deduct income tax expense to show the net profit margin. Other names for the same report include: P&L statement Income statement Operating statement Earnings statement Profit and loss report Profit and loss account P&L statements vs cash flow statements A profit and loss statement shows you how much profit a company has made over a given reporting period, starting with revenue over the given period and subtracting overhead costs and other expenses over the same period to calculate the company's profitability. A cash flow statement, on the other hand, is a financial document that shows how much cash has flowed in and out of the company during that particular period. While they sound similar, especially if the profit and loss statement template uses the cash method, there are still a few differences between them. Cash for office supplies might be both an expense and a cash outflow in a given fiscal year, but partner distributions are different—they're not expenses, but they are cash outlays. P&L statements vs. balance sheets Both documents are important to your business for different reasons, and they cover different aspects of company finances. While a profit and loss statement shows income and expenses over a certain period, a balance sheet offers information about a company’s assets, liabilities (business debt), and stockholder equity at a specific point in time. A balance sheet offers greater insight into the liquidity of a company’s finances, while a P&L is more focused on overall financial results. Why P&L statements matter Potential investors will want to check out your P&L statements to understand if your company is spending money wisely. And for the sake of transparency, all publicly traded companies are required to release a P&L statement every year. But even if these factors don’t apply to your organization, a P&L statement provides important insight into the financial health of your business. Business owners should be familiar with their P&Ls so they can make smarter day-to-day decisions and improve future business performance. Knowing where your money is going can help you take your company in the right direction. Understanding your company’s financial situation Want to improve your company's financial health? Take control of your cash flow with BILL Accounts Payable, BILL Accounts Receivable, and BILL Spend & Expense. Automate receivables and get paid 2x faster Automate payables to optimize early discounts, avoid late fees Automate expenses for maximum control over your budgets BILL also helps your accounting and finance team improve your security and reduce the chance of fraud. It even syncs with most popular accounting software options, giving you valuable insights with books that stay up to date. See what BILL can do for your business. Start using BILL today.
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Thank you! Your submission has been received\! Oops! Something went wrong while submitting the form. By continuing, you agree to BILL's [Terms of Service](https://www.bill.com/legal/terms-of-service) and [Privacy Notice](https://www.bill.com/privacy). A profit and loss (P\&L) statement details the revenue, expenses, and costs from a specific time period to show net profits. Also called an [income statement](https://www.bill.com/learning/income-statement), this financial report spells out whether a business is making a profit or losing money. It can help you understand what helps drive profitability in your business and also reveal potential financial issues. Along with a [balance sheet](https://www.bill.com/learning/balance-sheet) and a [cash flow statement](https://www.bill.com/learning/cash-flow-statements), a P\&L statement is one of the three primary [financial statements](https://www.bill.com/learning/financial-statements) used to report on a company’s financial position and results of operations. ### Key takeaways A profit and loss statement shows whether a business is making or losing money by tracking revenue and expenses. The statement includes sections like revenue, COGS, gross profit, and operating expenses to detail financial performance. There are different types of P\&L statements, including single-step and multi-step, to suit various business needs. ## What is a profit and loss statement? A profit and loss statement (P\&L), often referred as an [income statement](https://www.bill.com/learning/income-statement), is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically a quarter or a year. It provides insight into a company's ability to generate profit by comparing income and expenses. ![What is a profit and loss statement](https://cdn.prod.website-files.com/63e56114746188c54e2936e0/6760543f45d4d5930326e48f_6760540ca20f708a073ffd23_Profit%2526LossStatement_BILLP%2526LManagement.png) ## How profit and loss statements work A profit and loss statement has six essential sections. Here’s how they work: 1. Revenue. Profit and loss statements typically start with a revenue section, which includes income generated by primary business operations like sales revenue, service fees, and ‌other sources of income. 2. Cost of goods sold (COGS). If the business sells products, the cost of goods sold section reflects the direct costs associated with production or acquisition. It includes the cost of raw materials, manufacturing expenses, and direct labor costs. 3. Gross profit. You can calculate this by subtracting the cost of goods sold from ‌revenue. It represents profit generated from the core business operations before considering operating expenses. 4. Operating expenses. This section includes ‌the business expenses incurred from day-to-day operations. It consists of various categories, such as selling expenses, administrative expenses, research and development costs, marketing expenses, and more. 5. Operating income. Operating income, also known as operating profit, is calculated by subtracting the total operating expenses from the gross profit. It reflects the profitability of the company’s core operations. 6. Non-operating items. These items are revenues or expenses that aren’t directly related to the primary operations of the business. This may include interest income, interest expenses, gains or losses from investments, income taxes, and other similar items. 7. Net income or net loss. The final section of the profit and loss statement calculates the net income or net loss of the business. You calculate this figure by subtracting non-operating items from operating income. If the total is positive, it represents the net profit—if negative, it represents a net loss. ## Types of P\&L statements There are two ways to prepare a P\&L: the cash accounting method and the accrual method. The [cash accounting method](https://www.bill.com/learning/cash-basis-accounting) only looks at the cash that’s been received or paid. This approach is more common with smaller businesses. The accrual method accounts for money that’s earned, even if it is not yet received. It also tracks expenses that have been accrued but not yet paid. ## Examples of profit and loss statements Here’s an [example of a P\&L statement](https://finance.yahoo.com/quote/KHC/financials/?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALGgDWc3Zj_h6YGXR8sBwawZDpr1CJ9kBAteBHMHXMjlUZqkU-CuhD4Yy6wQ7t1w2Cd-zs8I9PQu1WqzZhn3fjYzw5tmfsjBseqdfMQ8rjUvVGpyBmbrCBhk-GRDvs5WL1LPnv_DBzRIcd-_5wJea_ZPALrnLK9kO6R10Yz7KCHP&_guc_consent_skip=1689785353#nofollow) (here called an income statement) for the Kraft Heinz Company. Notice that it includes details such as total revenue, operating expenses, and net income from various sources. While a P\&L for a small business will likely look very different, this example still offers useful information about how a successful company formats its statement. ## What do P\&L statements include? A profit and loss statement should include: - Total revenue - Cost of goods sold (COGS) - Gross profit - Operating expenses - Net profit or loss These are essentially different categories of income and expenses, and when added up will show whether your company is turning a profit or not. ## How to make a profit and loss statement After you pick the time frame you want to analyze, here are the steps to follow to create your own P\&L statement. 1. Calculate total revenue. The amount will differ depending on whether you use the accrual method or the cash accounting method, so make sure you know which system you’re using. 2. Determine the COGS. This includes both the direct and indirect costs of goods sold. 3. Subtract COGS from revenue. The resulting amount is your gross profit. 4. Calculate expenses. Look at everything your company has to pay to stay in business, including rent, advertising costs, and employee salaries. Subtract this amount from gross profit to determine total operating revenue. 5. Determine other income and expenses. If there are taxes, interest, amortization, depreciation, or other revenues and costs not included in the previous calculations, add them in. 6. Find the net profit. Subtract the total other income and expenses from operating income to find your net profit or loss. Try downloading our [profit and loss statement template](https://www.bill.com/business-templates/profit-loss-statement). Use the template instructions in the Excel file to get started. Automate your financial operations—demo BILL today [Demo](https://www.bill.com/demo-request) ## Types of P\&L statements There are several types of profit and loss statements you can prepare depending on your specific needs and business requirements. Here are some common types: 1. Single-step profit and loss statement. This is the most basic and straightforward type of profit and loss statement. It lists ‌revenues and gains on one side and ‌expenses and losses on the other‌. Subtract the total expenses from the total revenue to calculate the net profit or loss. 2. Multi-step profit and loss statement. This type provides more detail by segregating various components of revenue and expenses. It typically includes multiple steps to calculate business profits, operating income, and net income. It allows for a more comprehensive analysis of the company’s financial performance. 3. Vertical profit and loss statement. A vertical profit and loss statement presents financial data in a vertical format, with each line item representing a specific category of revenue or expense. It provides a clear breakdown of different income and expense streams, making it easier to analyze and compare figures. 4. Horizontal profit and loss statement. A horizontal profit and loss statement presents financial data in a horizontal format, typically comparing figures across multiple periods. This type allows for easy comparison of revenue and expense trends over time, highlighting the changes in financial performance from one period to another. 5. Contribution margin income statement. This statement focuses on the contribution margin, which represents the amount of revenue remaining after deducting only the variable costs associated with producing goods or delivering services. It helps in assessing the profitability of individual products or services. 6. Pro forma profit and loss statement. A pro forma profit and loss statement is a projected or forecasted statement that estimates future revenues, costs, and expenses. It’s often used for budgeting, business planning, and aiming to predict future business performance. ### Single-step vs. multi-step P\&L statements A profit and loss statement can be either single-step or multi-step. To understand what that means, we have to step back a little. Every publicly traded company is required to use Generally Accepted Accounting Principles (GAAP) created by the Financial Accounting Standards Board ([FASB](https://www.fasb.org/#nofollow)), and many private companies choose to comply with GAAP as well. GAAP outlines options for either single-step or multi-step P\&L statements. A single-step P\&L is pretty simple: it shows revenue, expenses, and net income. It makes for easier record-keeping, but it may also lack important information that might be useful for your business. This method is more popular with P\&L statements than income statements. A multi-step P\&L is more common with larger, publicly traded companies. In addition to tracking revenue, expenses, and net income, it categorizes expenses as either direct costs or indirect costs. This means the document includes a gross profit calculation and an operating income calculation, which can offer a clearer picture of how a business is run. Multi-step processes are more common in income statements than P\&L statements. ![Other names for profit and loss (P\&L) statements](https://cdn.prod.website-files.com/63e56114746188c54e2936e0/68012a46e5b1f1cee82f83d3_OtherNamesforP%26LStatements_ProfitLossStatement.webp) ## Profit and loss statement vs. other financial statements If you'd like to know how profit and loss statements stack up against other important financial statements in outlining a company's financial health, this section walks you through what you need to know. ### P\&L statements vs income statements Actually, these are two different names for the same thing. Companies generate revenue and pay out expenses (both operating and non-operating expenses) to end up with net earnings. So, both terms refer to the financial report that shows a company's revenue, expenses, and resulting profit or loss over a specific period. Generally, these reports start with gross revenue, deduct non-tax expenses to show the gross profit margin, then deduct income tax expense to show the net profit margin. Other names for the same report include: - P\&L statement - Income statement - Operating statement - Earnings statement - Profit and loss report - Profit and loss account ### P\&L statements vs cash flow statements A profit and loss statement shows you how much profit a company has made over a given reporting period, starting with revenue over the given period and subtracting overhead costs and other expenses over the same period to calculate the company's profitability. A cash flow statement, on the other hand, is a financial document that shows how much cash has flowed in and out of the company during that particular period. While they sound similar, especially if the profit and loss statement template uses the cash method, there are still a few differences between them. Cash for office supplies might be both an expense and a cash outflow in a given fiscal year, but partner distributions are different—they're not expenses, but they are cash outlays. ### P\&L statements vs. balance sheets Both documents are important to your business for different reasons, and they cover different aspects of company finances. While a profit and loss statement shows income and expenses over a certain period, a balance sheet offers information about a company’s assets, liabilities (business debt), and stockholder equity at a specific point in time. A balance sheet offers greater insight into the [liquidity](https://www.bill.com/blog/liquid-assets) of a company’s finances, while a P\&L is more focused on overall financial results. ## Why P\&L statements matter Potential investors will want to check out your P\&L statements to understand if your company is spending money wisely. And for the sake of transparency, all publicly traded companies are required to release a P\&L statement every year. But even if these factors don’t apply to your organization, a P\&L statement provides important insight into the financial health of your business. Business owners should be familiar with their P\&Ls so they can make smarter day-to-day decisions and improve future business performance. Knowing where your money is going can help you take your company in the right direction. ## Understanding your company’s financial situation Want to improve your company's financial health? Take control of your cash flow with BILL Accounts Payable, BILL Accounts Receivable, and BILL Spend & Expense. - [Automate receivables](https://www.bill.com/product/accounts-receivable) and get paid 2x faster - [Automate payables](https://www.bill.com/product/accounts-payable) to optimize early discounts, avoid late fees - [Automate expenses](https://www.bill.com/product/spend-and-expense) for maximum control over your budgets BILL also helps your accounting and finance team improve your security and reduce the chance of fraud. It even syncs with most popular accounting software options, giving you valuable insights with books that stay up to date. See what BILL can do for your business. Start using BILL today. [Sign up](https://www.bill.com/signup) Author Emily Taylor Contributing writer, BILL With a background in finance and over a decade of experience in business writing, Emily simplifies complex finance topics to help businesses streamline operations, manage cash flow, and make smarter financial decisions. Author ![](https://cdn.prod.website-files.com/63e3da3df35cd62f54751985/675a098b3a49e5517af4e001_author-placehold.png) Emily Taylor Contributing writer, BILL With a background in finance and over a decade of experience in business writing, Emily simplifies complex finance topics to help businesses streamline operations, manage cash flow, and make smarter financial decisions. Get more from BILL Subscribe to finance insights and thought leadership content delivered straight to your inbox. Thank you! Your submission has been received\! Oops! Something went wrong while submitting the form. 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Readable Markdown	A profit and loss (P\&L) statement details the revenue, expenses, and costs from a specific time period to show net profits. Also called an [income statement](https://www.bill.com/learning/income-statement), this financial report spells out whether a business is making a profit or losing money. It can help you understand what helps drive profitability in your business and also reveal potential financial issues. Along with a [balance sheet](https://www.bill.com/learning/balance-sheet) and a [cash flow statement](https://www.bill.com/learning/cash-flow-statements), a P\&L statement is one of the three primary [financial statements](https://www.bill.com/learning/financial-statements) used to report on a company’s financial position and results of operations. ### Key takeaways A profit and loss statement shows whether a business is making or losing money by tracking revenue and expenses. The statement includes sections like revenue, COGS, gross profit, and operating expenses to detail financial performance. There are different types of P\&L statements, including single-step and multi-step, to suit various business needs. ## What is a profit and loss statement? A profit and loss statement (P\&L), often referred as an [income statement](https://www.bill.com/learning/income-statement), is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically a quarter or a year. It provides insight into a company's ability to generate profit by comparing income and expenses. ![What is a profit and loss statement](https://cdn.prod.website-files.com/63e56114746188c54e2936e0/6760543f45d4d5930326e48f_6760540ca20f708a073ffd23_Profit%2526LossStatement_BILLP%2526LManagement.png) ## How profit and loss statements work A profit and loss statement has six essential sections. Here’s how they work: 1. Revenue. Profit and loss statements typically start with a revenue section, which includes income generated by primary business operations like sales revenue, service fees, and ‌other sources of income. 2. Cost of goods sold (COGS). If the business sells products, the cost of goods sold section reflects the direct costs associated with production or acquisition. It includes the cost of raw materials, manufacturing expenses, and direct labor costs. 3. Gross profit. You can calculate this by subtracting the cost of goods sold from ‌revenue. It represents profit generated from the core business operations before considering operating expenses. 4. Operating expenses. This section includes ‌the business expenses incurred from day-to-day operations. It consists of various categories, such as selling expenses, administrative expenses, research and development costs, marketing expenses, and more. 5. Operating income. Operating income, also known as operating profit, is calculated by subtracting the total operating expenses from the gross profit. It reflects the profitability of the company’s core operations. 6. Non-operating items. These items are revenues or expenses that aren’t directly related to the primary operations of the business. This may include interest income, interest expenses, gains or losses from investments, income taxes, and other similar items. 7. Net income or net loss. The final section of the profit and loss statement calculates the net income or net loss of the business. You calculate this figure by subtracting non-operating items from operating income. If the total is positive, it represents the net profit—if negative, it represents a net loss. ## Types of P\&L statements There are two ways to prepare a P\&L: the cash accounting method and the accrual method. The [cash accounting method](https://www.bill.com/learning/cash-basis-accounting) only looks at the cash that’s been received or paid. This approach is more common with smaller businesses. The accrual method accounts for money that’s earned, even if it is not yet received. It also tracks expenses that have been accrued but not yet paid. ## Examples of profit and loss statements Here’s an [example of a P\&L statement](https://finance.yahoo.com/quote/KHC/financials/?guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALGgDWc3Zj_h6YGXR8sBwawZDpr1CJ9kBAteBHMHXMjlUZqkU-CuhD4Yy6wQ7t1w2Cd-zs8I9PQu1WqzZhn3fjYzw5tmfsjBseqdfMQ8rjUvVGpyBmbrCBhk-GRDvs5WL1LPnv_DBzRIcd-_5wJea_ZPALrnLK9kO6R10Yz7KCHP&_guc_consent_skip=1689785353#nofollow) (here called an income statement) for the Kraft Heinz Company. Notice that it includes details such as total revenue, operating expenses, and net income from various sources. While a P\&L for a small business will likely look very different, this example still offers useful information about how a successful company formats its statement. ## What do P\&L statements include? A profit and loss statement should include: - Total revenue - Cost of goods sold (COGS) - Gross profit - Operating expenses - Net profit or loss These are essentially different categories of income and expenses, and when added up will show whether your company is turning a profit or not. ## How to make a profit and loss statement After you pick the time frame you want to analyze, here are the steps to follow to create your own P\&L statement. 1. Calculate total revenue. The amount will differ depending on whether you use the accrual method or the cash accounting method, so make sure you know which system you’re using. 2. Determine the COGS. This includes both the direct and indirect costs of goods sold. 3. Subtract COGS from revenue. The resulting amount is your gross profit. 4. Calculate expenses. Look at everything your company has to pay to stay in business, including rent, advertising costs, and employee salaries. Subtract this amount from gross profit to determine total operating revenue. 5. Determine other income and expenses. If there are taxes, interest, amortization, depreciation, or other revenues and costs not included in the previous calculations, add them in. 6. Find the net profit. Subtract the total other income and expenses from operating income to find your net profit or loss. Try downloading our [profit and loss statement template](https://www.bill.com/business-templates/profit-loss-statement). Use the template instructions in the Excel file to get started. Automate your financial operations—demo BILL today ## Types of P\&L statements There are several types of profit and loss statements you can prepare depending on your specific needs and business requirements. Here are some common types: 1. Single-step profit and loss statement. This is the most basic and straightforward type of profit and loss statement. It lists ‌revenues and gains on one side and ‌expenses and losses on the other‌. Subtract the total expenses from the total revenue to calculate the net profit or loss. 2. Multi-step profit and loss statement. This type provides more detail by segregating various components of revenue and expenses. It typically includes multiple steps to calculate business profits, operating income, and net income. It allows for a more comprehensive analysis of the company’s financial performance. 3. Vertical profit and loss statement. A vertical profit and loss statement presents financial data in a vertical format, with each line item representing a specific category of revenue or expense. It provides a clear breakdown of different income and expense streams, making it easier to analyze and compare figures. 4. Horizontal profit and loss statement. A horizontal profit and loss statement presents financial data in a horizontal format, typically comparing figures across multiple periods. This type allows for easy comparison of revenue and expense trends over time, highlighting the changes in financial performance from one period to another. 5. Contribution margin income statement. This statement focuses on the contribution margin, which represents the amount of revenue remaining after deducting only the variable costs associated with producing goods or delivering services. It helps in assessing the profitability of individual products or services. 6. Pro forma profit and loss statement. A pro forma profit and loss statement is a projected or forecasted statement that estimates future revenues, costs, and expenses. It’s often used for budgeting, business planning, and aiming to predict future business performance. ### Single-step vs. multi-step P\&L statements A profit and loss statement can be either single-step or multi-step. To understand what that means, we have to step back a little. Every publicly traded company is required to use Generally Accepted Accounting Principles (GAAP) created by the Financial Accounting Standards Board ([FASB](https://www.fasb.org/#nofollow)), and many private companies choose to comply with GAAP as well. GAAP outlines options for either single-step or multi-step P\&L statements. A single-step P\&L is pretty simple: it shows revenue, expenses, and net income. It makes for easier record-keeping, but it may also lack important information that might be useful for your business. This method is more popular with P\&L statements than income statements. A multi-step P\&L is more common with larger, publicly traded companies. In addition to tracking revenue, expenses, and net income, it categorizes expenses as either direct costs or indirect costs. This means the document includes a gross profit calculation and an operating income calculation, which can offer a clearer picture of how a business is run. Multi-step processes are more common in income statements than P\&L statements. ![Other names for profit and loss (P\&L) statements](https://cdn.prod.website-files.com/63e56114746188c54e2936e0/68012a46e5b1f1cee82f83d3_OtherNamesforP%26LStatements_ProfitLossStatement.webp) ## Profit and loss statement vs. other financial statements If you'd like to know how profit and loss statements stack up against other important financial statements in outlining a company's financial health, this section walks you through what you need to know. ### P\&L statements vs income statements Actually, these are two different names for the same thing. Companies generate revenue and pay out expenses (both operating and non-operating expenses) to end up with net earnings. So, both terms refer to the financial report that shows a company's revenue, expenses, and resulting profit or loss over a specific period. Generally, these reports start with gross revenue, deduct non-tax expenses to show the gross profit margin, then deduct income tax expense to show the net profit margin. Other names for the same report include: - P\&L statement - Income statement - Operating statement - Earnings statement - Profit and loss report - Profit and loss account ### P\&L statements vs cash flow statements A profit and loss statement shows you how much profit a company has made over a given reporting period, starting with revenue over the given period and subtracting overhead costs and other expenses over the same period to calculate the company's profitability. A cash flow statement, on the other hand, is a financial document that shows how much cash has flowed in and out of the company during that particular period. While they sound similar, especially if the profit and loss statement template uses the cash method, there are still a few differences between them. Cash for office supplies might be both an expense and a cash outflow in a given fiscal year, but partner distributions are different—they're not expenses, but they are cash outlays. ### P\&L statements vs. balance sheets Both documents are important to your business for different reasons, and they cover different aspects of company finances. While a profit and loss statement shows income and expenses over a certain period, a balance sheet offers information about a company’s assets, liabilities (business debt), and stockholder equity at a specific point in time. A balance sheet offers greater insight into the [liquidity](https://www.bill.com/blog/liquid-assets) of a company’s finances, while a P\&L is more focused on overall financial results. ## Why P\&L statements matter Potential investors will want to check out your P\&L statements to understand if your company is spending money wisely. And for the sake of transparency, all publicly traded companies are required to release a P\&L statement every year. But even if these factors don’t apply to your organization, a P\&L statement provides important insight into the financial health of your business. Business owners should be familiar with their P\&Ls so they can make smarter day-to-day decisions and improve future business performance. Knowing where your money is going can help you take your company in the right direction. ## Understanding your company’s financial situation Want to improve your company's financial health? Take control of your cash flow with BILL Accounts Payable, BILL Accounts Receivable, and BILL Spend & Expense. - [Automate receivables](https://www.bill.com/product/accounts-receivable) and get paid 2x faster - [Automate payables](https://www.bill.com/product/accounts-payable) to optimize early discounts, avoid late fees - [Automate expenses](https://www.bill.com/product/spend-and-expense) for maximum control over your budgets BILL also helps your accounting and finance team improve your security and reduce the chance of fraud. It even syncs with most popular accounting software options, giving you valuable insights with books that stay up to date. See what BILL can do for your business. Start using BILL today.
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