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| Meta Title | How to Create a P&L Statement in Excel |
| Meta Description | Learn how to create a P&L statement in Excel with step-by-step guidance. Master formulas and best practices to analyze your business’s financial performance effectively. |
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| Boilerpipe Text | Creating a Profit and Loss statement from scratch in Excel can feel like a major hurdle, but it is one of the most powerful ways to understand your business's financial performance. This guide will walk you through the entire process, step by step, from organizing your raw data to building a polished and insightful financial report. We'll cover the essential formulas and best practices you need to confidently build a P&,L statement that drives smarter business decisions.
What is a P&,L Statement?
A Profit and Loss (P&,L) statement, also known as an income statement, is a financial report that summarizes your business's revenues, costs, and expenses over a specific period - typically a month, a quarter, or a year. Its primary purpose is to show whether you made a profit or a loss during that time. It tells the story of your company’s financial operations from the top line (revenue) to the bottom line (net income).
Before building one, it’s crucial to understand its key components:
Revenue (or Sales):
The total amount of money your business earned from selling goods or services.
Cost of Goods Sold (COGS):
The direct costs associated with producing the goods or services you sold, including raw materials and direct labor costs.
Gross Profit:
Calculated by subtracting COGS from Revenue. It shows how much profit you make on your products or services before accounting for other operating expenses.
Operating Expenses (OpEx):
The costs required to run your business that are not directly tied to production, including expenses like rent, marketing, salaries of administrative staff, and utilities.
Operating Income:
Calculated by subtracting Operating Expenses from Gross Profit. This metric, often called Earnings Before Interest and Taxes (EBIT), shows the profit generated from core business operations.
Non-Operating Items:
Income or expenses from activities not related to your core business, such as interest earned on savings or interest paid on loans.
Net Income:
The final "bottom line." It is the total profit (or loss) after all revenues have been added and all expenses have been subtracted.
Step 1: Get Your Data Ready
You can’t build a P&,L without clean, organized data. The most common source is a transaction log or an export from your accounting software. The goal is to have a simple, flat table of all your business transactions in one Excel sheet. Trying to build a P&,L from messy data is where most people get stuck.
Create a dedicated sheet in your Excel workbook named "Data" or "Transactions." Structure it with these essential columns:
Date:
The date of each transaction.
Description:
A brief note about the transaction (e.g., "Client XYZ - Project A," or "Monthly Office Rent").
Category:
Assign a high-level category to each transaction. This is the most critical step for an accurate P&,L. Examples include 'Sales Revenue', 'COGS-Materials', 'Marketing Expense', 'Salaries', 'Rent Expense', 'Interest Income'.
Amount:
The value of the transaction. You can use a single column with positive numbers for income and negative numbers for expenses, which often makes formulas simpler.
Being disciplined about categorizing every single transaction will save you countless hours of headaches later on. This tidy dataset will be the engine for your entire P&,L statement.
Step 2: Set Up Your P&,L Template
Now, open a new sheet in your workbook and name it "P&,L Statement." This is where you will build the final report. The standard layout uses rows for your P&,L categories and columns for time periods.
Here’s how to structure it:
In Column A, list out the P&,L categories in the correct order as described earlier: Revenue, COGS, Gross Profit, then your various Operating Expenses, Total Operating Expenses, Operating Income, Non-Operating Items, and finally Net Income.
In row 1, list your time periods. For instance, start with "Jan," "Feb," "Mar" in cells B1, C1, D1, and so on. It's also wise to add a "YTD Total" (Year-to-Date Total) column at the end to sum up the periods.
Step 3: Use Formulas to Populate Your P&,L
With your transaction "Data" sheet and P&,L structure ready, it's time to use formulas to pull the right numbers into your report. We'll primarily use the
SUMIFS
function, which is perfect for summing values based on multiple criteria (like category and date).
Calculating Revenue
Let’s assume your "Data" sheet has transaction amounts in Column D, categories in Column C, and dates in Column A. To calculate the Total Revenue for January in a cell B4 on your P&,L sheet, you would use a formula like this:
=SUMIFS(Data!D:D, Data!C:C, "Sales Revenue", Data!A:A, ">="&,[Start Date of Month], Data!A:A, "<,="&,[End Date of Month])
To make this work in your actual sheet, you'll reference cells that contain the start and end dates for each month. For example, have a helper row above your months specifying the first and last day (e.g., cell B2 = 1/1/2024 and B3 = 1/31/2024).
The updated formula for revenue for January (in cell B4) would look like this:
=SUMIFS(Data!D:D, Data!C:C, $A4, Data!A:A, ">="&,B$2, Data!A:A, "<,="&,B$3)
By using mixed references with the dollar signs ($), you can drag this formula across for other months and down for other categories.
Calculating COGS and Operating Expenses
You can use the exact same
SUMIFS
logic for COGS and each of your individual Operating Expense line items. Simply drag your revenue formula down to the corresponding rows. As long as the category names in Column A of your P&,L sheet perfectly match the category names in your "Data" sheet, Excel will automatically sum the correct transactions.
For example, for Marketing Expense for January (in say, cell B10), the formula would automatically become:
=SUMIFS(Data!D:D, Data!C:C, $A10, Data!A:A, ">="&,B$2, Data!A:A, "<,="&,B$3)
Calculating Summary Lines (Gross Profit, Net Income, etc.)
The remaining lines on your P&,L are simple arithmetic formulas:
Gross Profit =
Revenue - COGS
Total Operating Expenses =
SUM(All of your individual expense lines)
Operating Income =
Gross Profit - Total Operating Expenses
Net Income =
Operating Income + Non-Operating Income - Non-Operating Expenses. Your net income line should be a vibrant color, it's the star of the show!
Step 4: Enhance Your P&,L Statement for Deeper Insights
A basic P&,L is great, but adding a few analytical layers can transform it from a simple report into a strategic tool.
Add "Percentage of Revenue" Analysis
Common-size analysis, which expresses each line item as a percentage of total revenue, helps you understand the "why" behind your numbers. It shows you where your money is going in relative terms. Add a new column next to each monthly total.
For COGS, the formula would be:
=[COGS Amount] / [Revenue Amount]
For example, if January’s revenue is in B4 and COGS is in B5, the formula in a new column would be
=B5/$B$4
. The dollar signs on `$B$4` ensure that when you drag the formula down for other expense categories, it always divides by the total revenue for that month. Format these cells as a percentage.
Visualize Your Data with Charts
Dashboards in Excel can be clunky, but a few simple charts alongside your P&,L can make trends much easier to spot. Select your monthly Net Income data and insert a simple column chart to visualize profitability over time. A pie chart showing the breakdown of your operating expenses is another great option to see where your money is going.
While Excel charts can sometimes look dated without significant formatting, they are still a vast improvement over just a table of numbers for presentations.
Use a Pivot Table for a Dynamic P&,L
For a more advanced and flexible approach, you can create your P&,L using a Pivot Table. Pivot Tables are fantastic for summarizing large datasets dynamically without complex formulas.
Select your entire table in your "Data" sheet.
Go to Insert >, PivotTable.
Drag "Category" to the Rows area.
Drag "Date" to the Columns area (Excel will automatically group by months and years).
Drag "Amount" to the Values area.
This will instantly create a summary that looks very similar to your P&,L structure. You will still need to manually add calculated items for Gross Profit and Net Income, but it’s a much faster way to organize your report, especially if you have many categories.
Final Thoughts
Building a well-structured P&,L statement in Excel is an invaluable skill that gives you complete clarity on your business's financial engine. By properly organizing your data, mastering functions like SUMIFS, and adding analytical layers like variance analysis, you can create a professional-grade report that empowers you to make smarter, data-driven decisions.
At Bricks, we know that while Excel is powerful, crafting these reports can be time-consuming and often requires hours of manual formatting to get right. That’s why we created an AI data analyst that automates this entire process. You can upload your raw transactional data as a simple CSV or Excel file, and our AI instantly prepares a beautiful, interactive dashboard, featuring a complete P&,L statement, key charts, and written insights - all in seconds. It allows you to skip the manual setup and still gain the insights you need to confidently report on your performance. Feel free to try
Bricks
for yourself. |
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# How to Create a P\&L Statement in Excel
By [**Spencer Lanoue**](https://www.thebricks.com/author/spencer-lanoue)
November 7, 2025
Contents
Creating a Profit and Loss statement from scratch in Excel can feel like a major hurdle, but it is one of the most powerful ways to understand your business's financial performance. This guide will walk you through the entire process, step by step, from organizing your raw data to building a polished and insightful financial report. We'll cover the essential formulas and best practices you need to confidently build a P&,L statement that drives smarter business decisions.
## What is a P&,L Statement?
A Profit and Loss (P&,L) statement, also known as an income statement, is a financial report that summarizes your business's revenues, costs, and expenses over a specific period - typically a month, a quarter, or a year. Its primary purpose is to show whether you made a profit or a loss during that time. It tells the story of your company’s financial operations from the top line (revenue) to the bottom line (net income).
Before building one, it’s crucial to understand its key components:
- **Revenue (or Sales):** The total amount of money your business earned from selling goods or services.
- **Cost of Goods Sold (COGS):** The direct costs associated with producing the goods or services you sold, including raw materials and direct labor costs.
- **Gross Profit:** Calculated by subtracting COGS from Revenue. It shows how much profit you make on your products or services before accounting for other operating expenses.
- **Operating Expenses (OpEx):** The costs required to run your business that are not directly tied to production, including expenses like rent, marketing, salaries of administrative staff, and utilities.
- **Operating Income:** Calculated by subtracting Operating Expenses from Gross Profit. This metric, often called Earnings Before Interest and Taxes (EBIT), shows the profit generated from core business operations.
- **Non-Operating Items:** Income or expenses from activities not related to your core business, such as interest earned on savings or interest paid on loans.
- **Net Income:** The final "bottom line." It is the total profit (or loss) after all revenues have been added and all expenses have been subtracted.
## Step 1: Get Your Data Ready
You can’t build a P&,L without clean, organized data. The most common source is a transaction log or an export from your accounting software. The goal is to have a simple, flat table of all your business transactions in one Excel sheet. Trying to build a P&,L from messy data is where most people get stuck.
Create a dedicated sheet in your Excel workbook named "Data" or "Transactions." Structure it with these essential columns:
- **Date:** The date of each transaction.
- **Description:** A brief note about the transaction (e.g., "Client XYZ - Project A," or "Monthly Office Rent").
- **Category:** Assign a high-level category to each transaction. This is the most critical step for an accurate P&,L. Examples include 'Sales Revenue', 'COGS-Materials', 'Marketing Expense', 'Salaries', 'Rent Expense', 'Interest Income'.
- **Amount:** The value of the transaction. You can use a single column with positive numbers for income and negative numbers for expenses, which often makes formulas simpler.
Being disciplined about categorizing every single transaction will save you countless hours of headaches later on. This tidy dataset will be the engine for your entire P&,L statement.
## Step 2: Set Up Your P&,L Template
Now, open a new sheet in your workbook and name it "P&,L Statement." This is where you will build the final report. The standard layout uses rows for your P&,L categories and columns for time periods.
Here’s how to structure it:
1. In Column A, list out the P&,L categories in the correct order as described earlier: Revenue, COGS, Gross Profit, then your various Operating Expenses, Total Operating Expenses, Operating Income, Non-Operating Items, and finally Net Income.
2. In row 1, list your time periods. For instance, start with "Jan," "Feb," "Mar" in cells B1, C1, D1, and so on. It's also wise to add a "YTD Total" (Year-to-Date Total) column at the end to sum up the periods.
## Step 3: Use Formulas to Populate Your P&,L
With your transaction "Data" sheet and P&,L structure ready, it's time to use formulas to pull the right numbers into your report. We'll primarily use the `SUMIFS` function, which is perfect for summing values based on multiple criteria (like category and date).
### Calculating Revenue
Let’s assume your "Data" sheet has transaction amounts in Column D, categories in Column C, and dates in Column A. To calculate the Total Revenue for January in a cell B4 on your P&,L sheet, you would use a formula like this:
`=SUMIFS(Data!D:D, Data!C:C, "Sales Revenue", Data!A:A, ">="&,[Start Date of Month], Data!A:A, "<,="&,[End Date of Month])`
To make this work in your actual sheet, you'll reference cells that contain the start and end dates for each month. For example, have a helper row above your months specifying the first and last day (e.g., cell B2 = 1/1/2024 and B3 = 1/31/2024).
The updated formula for revenue for January (in cell B4) would look like this:
`=SUMIFS(Data!D:D, Data!C:C, $A4, Data!A:A, ">="&,B$2, Data!A:A, "<,="&,B$3)`
By using mixed references with the dollar signs (\$), you can drag this formula across for other months and down for other categories.
### Calculating COGS and Operating Expenses
You can use the exact same `SUMIFS` logic for COGS and each of your individual Operating Expense line items. Simply drag your revenue formula down to the corresponding rows. As long as the category names in Column A of your P&,L sheet perfectly match the category names in your "Data" sheet, Excel will automatically sum the correct transactions.
For example, for Marketing Expense for January (in say, cell B10), the formula would automatically become:
`=SUMIFS(Data!D:D, Data!C:C, $A10, Data!A:A, ">="&,B$2, Data!A:A, "<,="&,B$3)`
### Calculating Summary Lines (Gross Profit, Net Income, etc.)
The remaining lines on your P&,L are simple arithmetic formulas:
- **Gross Profit =** Revenue - COGS
- **Total Operating Expenses =** `SUM(All of your individual expense lines)`
- **Operating Income =** Gross Profit - Total Operating Expenses
- **Net Income =** Operating Income + Non-Operating Income - Non-Operating Expenses. Your net income line should be a vibrant color, it's the star of the show\!
## Step 4: Enhance Your P&,L Statement for Deeper Insights
A basic P&,L is great, but adding a few analytical layers can transform it from a simple report into a strategic tool.
### Add "Percentage of Revenue" Analysis
Common-size analysis, which expresses each line item as a percentage of total revenue, helps you understand the "why" behind your numbers. It shows you where your money is going in relative terms. Add a new column next to each monthly total.
For COGS, the formula would be:
`=[COGS Amount] / [Revenue Amount]`
For example, if January’s revenue is in B4 and COGS is in B5, the formula in a new column would be `=B5/$B$4`. The dollar signs on \`\$B\$4\` ensure that when you drag the formula down for other expense categories, it always divides by the total revenue for that month. Format these cells as a percentage.
### Visualize Your Data with Charts
Dashboards in Excel can be clunky, but a few simple charts alongside your P&,L can make trends much easier to spot. Select your monthly Net Income data and insert a simple column chart to visualize profitability over time. A pie chart showing the breakdown of your operating expenses is another great option to see where your money is going.
While Excel charts can sometimes look dated without significant formatting, they are still a vast improvement over just a table of numbers for presentations.
### Use a Pivot Table for a Dynamic P&,L
For a more advanced and flexible approach, you can create your P&,L using a Pivot Table. Pivot Tables are fantastic for summarizing large datasets dynamically without complex formulas.
1. Select your entire table in your "Data" sheet.
2. Go to Insert \>, PivotTable.
3. Drag "Category" to the Rows area.
4. Drag "Date" to the Columns area (Excel will automatically group by months and years).
5. Drag "Amount" to the Values area.
This will instantly create a summary that looks very similar to your P&,L structure. You will still need to manually add calculated items for Gross Profit and Net Income, but it’s a much faster way to organize your report, especially if you have many categories.
## Final Thoughts
Building a well-structured P&,L statement in Excel is an invaluable skill that gives you complete clarity on your business's financial engine. By properly organizing your data, mastering functions like SUMIFS, and adding analytical layers like variance analysis, you can create a professional-grade report that empowers you to make smarter, data-driven decisions.
At Bricks, we know that while Excel is powerful, crafting these reports can be time-consuming and often requires hours of manual formatting to get right. That’s why we created an AI data analyst that automates this entire process. You can upload your raw transactional data as a simple CSV or Excel file, and our AI instantly prepares a beautiful, interactive dashboard, featuring a complete P&,L statement, key charts, and written insights - all in seconds. It allows you to skip the manual setup and still gain the insights you need to confidently report on your performance. Feel free to try [Bricks](https://app.thebricks.com/sign-up) for yourself.
[Spencer Lanoue](https://www.thebricks.com/author/spencer-lanoue)
[](https://linkedin.com/in/spencerlanoue)[](https://x.com/slanoue)
Spencer’s spent 10+ years building products and growing startups like Buffer, UserTesting, and Bump Health. He lives in spreadsheets—crunching data, building dashboards, and creating visuals to drive decisions. At Bricks, he’s focused on figuring out how to use AI to automate the busy work of spreadsheets, letting AI handle the heavy lifting for you.
[](https://linkedin.com/in/spencerlanoue)[](https://x.com/slanoue)
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| Readable Markdown | Creating a Profit and Loss statement from scratch in Excel can feel like a major hurdle, but it is one of the most powerful ways to understand your business's financial performance. This guide will walk you through the entire process, step by step, from organizing your raw data to building a polished and insightful financial report. We'll cover the essential formulas and best practices you need to confidently build a P&,L statement that drives smarter business decisions.
## What is a P&,L Statement?
A Profit and Loss (P&,L) statement, also known as an income statement, is a financial report that summarizes your business's revenues, costs, and expenses over a specific period - typically a month, a quarter, or a year. Its primary purpose is to show whether you made a profit or a loss during that time. It tells the story of your company’s financial operations from the top line (revenue) to the bottom line (net income).
Before building one, it’s crucial to understand its key components:
- **Revenue (or Sales):** The total amount of money your business earned from selling goods or services.
- **Cost of Goods Sold (COGS):** The direct costs associated with producing the goods or services you sold, including raw materials and direct labor costs.
- **Gross Profit:** Calculated by subtracting COGS from Revenue. It shows how much profit you make on your products or services before accounting for other operating expenses.
- **Operating Expenses (OpEx):** The costs required to run your business that are not directly tied to production, including expenses like rent, marketing, salaries of administrative staff, and utilities.
- **Operating Income:** Calculated by subtracting Operating Expenses from Gross Profit. This metric, often called Earnings Before Interest and Taxes (EBIT), shows the profit generated from core business operations.
- **Non-Operating Items:** Income or expenses from activities not related to your core business, such as interest earned on savings or interest paid on loans.
- **Net Income:** The final "bottom line." It is the total profit (or loss) after all revenues have been added and all expenses have been subtracted.
## Step 1: Get Your Data Ready
You can’t build a P&,L without clean, organized data. The most common source is a transaction log or an export from your accounting software. The goal is to have a simple, flat table of all your business transactions in one Excel sheet. Trying to build a P&,L from messy data is where most people get stuck.
Create a dedicated sheet in your Excel workbook named "Data" or "Transactions." Structure it with these essential columns:
- **Date:** The date of each transaction.
- **Description:** A brief note about the transaction (e.g., "Client XYZ - Project A," or "Monthly Office Rent").
- **Category:** Assign a high-level category to each transaction. This is the most critical step for an accurate P&,L. Examples include 'Sales Revenue', 'COGS-Materials', 'Marketing Expense', 'Salaries', 'Rent Expense', 'Interest Income'.
- **Amount:** The value of the transaction. You can use a single column with positive numbers for income and negative numbers for expenses, which often makes formulas simpler.
Being disciplined about categorizing every single transaction will save you countless hours of headaches later on. This tidy dataset will be the engine for your entire P&,L statement.
## Step 2: Set Up Your P&,L Template
Now, open a new sheet in your workbook and name it "P&,L Statement." This is where you will build the final report. The standard layout uses rows for your P&,L categories and columns for time periods.
Here’s how to structure it:
1. In Column A, list out the P&,L categories in the correct order as described earlier: Revenue, COGS, Gross Profit, then your various Operating Expenses, Total Operating Expenses, Operating Income, Non-Operating Items, and finally Net Income.
2. In row 1, list your time periods. For instance, start with "Jan," "Feb," "Mar" in cells B1, C1, D1, and so on. It's also wise to add a "YTD Total" (Year-to-Date Total) column at the end to sum up the periods.
## Step 3: Use Formulas to Populate Your P&,L
With your transaction "Data" sheet and P&,L structure ready, it's time to use formulas to pull the right numbers into your report. We'll primarily use the `SUMIFS` function, which is perfect for summing values based on multiple criteria (like category and date).
### Calculating Revenue
Let’s assume your "Data" sheet has transaction amounts in Column D, categories in Column C, and dates in Column A. To calculate the Total Revenue for January in a cell B4 on your P&,L sheet, you would use a formula like this:
`=SUMIFS(Data!D:D, Data!C:C, "Sales Revenue", Data!A:A, ">="&,[Start Date of Month], Data!A:A, "<,="&,[End Date of Month])`
To make this work in your actual sheet, you'll reference cells that contain the start and end dates for each month. For example, have a helper row above your months specifying the first and last day (e.g., cell B2 = 1/1/2024 and B3 = 1/31/2024).
The updated formula for revenue for January (in cell B4) would look like this:
`=SUMIFS(Data!D:D, Data!C:C, $A4, Data!A:A, ">="&,B$2, Data!A:A, "<,="&,B$3)`
By using mixed references with the dollar signs (\$), you can drag this formula across for other months and down for other categories.
### Calculating COGS and Operating Expenses
You can use the exact same `SUMIFS` logic for COGS and each of your individual Operating Expense line items. Simply drag your revenue formula down to the corresponding rows. As long as the category names in Column A of your P&,L sheet perfectly match the category names in your "Data" sheet, Excel will automatically sum the correct transactions.
For example, for Marketing Expense for January (in say, cell B10), the formula would automatically become:
`=SUMIFS(Data!D:D, Data!C:C, $A10, Data!A:A, ">="&,B$2, Data!A:A, "<,="&,B$3)`
### Calculating Summary Lines (Gross Profit, Net Income, etc.)
The remaining lines on your P&,L are simple arithmetic formulas:
- **Gross Profit =** Revenue - COGS
- **Total Operating Expenses =** `SUM(All of your individual expense lines)`
- **Operating Income =** Gross Profit - Total Operating Expenses
- **Net Income =** Operating Income + Non-Operating Income - Non-Operating Expenses. Your net income line should be a vibrant color, it's the star of the show\!
## Step 4: Enhance Your P&,L Statement for Deeper Insights
A basic P&,L is great, but adding a few analytical layers can transform it from a simple report into a strategic tool.
### Add "Percentage of Revenue" Analysis
Common-size analysis, which expresses each line item as a percentage of total revenue, helps you understand the "why" behind your numbers. It shows you where your money is going in relative terms. Add a new column next to each monthly total.
For COGS, the formula would be:
`=[COGS Amount] / [Revenue Amount]`
For example, if January’s revenue is in B4 and COGS is in B5, the formula in a new column would be `=B5/$B$4`. The dollar signs on \`\$B\$4\` ensure that when you drag the formula down for other expense categories, it always divides by the total revenue for that month. Format these cells as a percentage.
### Visualize Your Data with Charts
Dashboards in Excel can be clunky, but a few simple charts alongside your P&,L can make trends much easier to spot. Select your monthly Net Income data and insert a simple column chart to visualize profitability over time. A pie chart showing the breakdown of your operating expenses is another great option to see where your money is going.
While Excel charts can sometimes look dated without significant formatting, they are still a vast improvement over just a table of numbers for presentations.
### Use a Pivot Table for a Dynamic P&,L
For a more advanced and flexible approach, you can create your P&,L using a Pivot Table. Pivot Tables are fantastic for summarizing large datasets dynamically without complex formulas.
1. Select your entire table in your "Data" sheet.
2. Go to Insert \>, PivotTable.
3. Drag "Category" to the Rows area.
4. Drag "Date" to the Columns area (Excel will automatically group by months and years).
5. Drag "Amount" to the Values area.
This will instantly create a summary that looks very similar to your P&,L structure. You will still need to manually add calculated items for Gross Profit and Net Income, but it’s a much faster way to organize your report, especially if you have many categories.
## Final Thoughts
Building a well-structured P&,L statement in Excel is an invaluable skill that gives you complete clarity on your business's financial engine. By properly organizing your data, mastering functions like SUMIFS, and adding analytical layers like variance analysis, you can create a professional-grade report that empowers you to make smarter, data-driven decisions.
At Bricks, we know that while Excel is powerful, crafting these reports can be time-consuming and often requires hours of manual formatting to get right. That’s why we created an AI data analyst that automates this entire process. You can upload your raw transactional data as a simple CSV or Excel file, and our AI instantly prepares a beautiful, interactive dashboard, featuring a complete P&,L statement, key charts, and written insights - all in seconds. It allows you to skip the manual setup and still gain the insights you need to confidently report on your performance. Feel free to try [Bricks](https://app.thebricks.com/sign-up) for yourself. |
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