🕷️ Crawler Inspector

URL Lookup

Direct Parameter Lookup

Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 163 (from laksa174)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa163.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.wallstreetprep.com/knowledge/profit-loss/\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.wallstreetprep.com/knowledge/profit-loss/\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/","crawl_time":1775473854,"first_indexed_time":1641911329,"http_code":200,"src_unparsed":"com,wallstreetprep!www,\/knowledge\/profit-loss\/ s443","src_root_hash":"6309209609011708963","history_drop_reason":null,"meta_title":"Profit and Loss Statement (P&L) | Formula + Calculator","meta_descriptions":["Profit and Loss Statement (P&L) is a financial statement that starts with revenue and deducts costs and expenses to arrive at net income."],"attrs_boilerpipe_text":"What is Profit and Loss Statement?\nHow to Read a Profit and Loss Statement\nHow to Prepare Profit and Loss Statement (P&L)\nWhat is the Format of a P&L Statement?\nProfit and Loss Statement Example: Alphabet (GOOGL)\nProfit and Loss Statement Calculator — Excel Template\nProfit and Loss Statement Calculation Example\nThe\nProfit and Loss Statement (P&L)\nis a financial statement that starts with revenue and deducts costs and expenses to arrive at net income, the profitability of a company, in a specified period.\nThe P&L statement—or “Income Statement”—is a financial report that summarizes a particular company’s revenue, costs, and expenses across a stated period.\nHow to Read a Profit and Loss Statement\nThe profit and loss statement—or “P&L Statement”—is one of the three core financial statements that publicly traded companies are obligated to file with the SEC.\nFor public companies listed in the U.S., the\n10-Q\nprofit and loss statement (P&L), often used interchangeably with the term “Income Statement”, must be filed each quarter, with a\n10-K\nannual filing due for the 4\nth\nquarter.\nQuarterly Filing (10-Q) ➝\n3x Per Year (and 4th is 10-K)\nAnnual Filing (10-K) ➝\n1x Per Year\nTogether, alongside the\ncash flow statement (CFS)\nand\nbalance sheet (B\/S)\n, the P&L statement provides a detailed depiction of the financial state of a company.\nIn particular, the P&L statement shows the\noperating performance\nof the company as well as the costs and expenses that impact its\nprofit margins\n.\nUpon assessing a company’s P&L statement, one can gauge the company’s ability to:\nGenerate Revenue ➝\nImprove Sales Growth (“Top Line”)\nOptimize Operating Structure ➝\nReduce Cost of Goods Sold (COGS) and Operating Costs (SG&A, R&D)\nIncrease Profitability\n→ Higher Gross Margin, Contribution Margin (CM), Operating Profit Margin, EBITDA Margin, and Net Profit Margin\nHow to Prepare Profit and Loss Statement (P&L)\nThe profit and loss statement (P&L) can be prepared by an accountant under two different methods:\nAccrual Accounting (U.S. GAAP) ➝\nUnder the revenue recognition principle (ASC 606), revenue is recognized when “earned” under GAAP standards (i.e. product or service delivered to the customer regardless of whether\ncash\npayment was received). Expenses are matched in the same period as the corresponding revenue they helped create, which is called the matching principle. The income statement filed with the SEC must abide by U.S. GAAP reporting standards.\nCash Basis Accounting ➝\nUnder cash basis accounting, revenue is not recognized until the customer pays in cash to the company for the products or services received. Expenses under cash accounting, similar to revenue, are not recognized until the cash outflow occurs – meaning that the company has actually paid the third party in cash. The income statement prepared under cash-basis accounting are more common for private companies.\nWhat is the Format of a P&L Statement?\nThe standard profit and loss statement (P&L) format will consist of the following line items:\nIncome Statement\nLine Items\nNet Revenue\nNet Revenue = Gross Revenue – Returns – Discounts – Sales Allowances\nLess: Cost of Goods Sold (COGS)\nCost of Goods Sold (COGS) = Beginning Inventory + Purchases in the Current Period – Ending Inventory\nGross Profit\nGross Profit = Revenue – COGS\nLess: Operating Expenses (Opex)\nOperating Expenses = Σ SG&A, R&D\nOperating Income (\nEBIT\n)\nEBIT = Gross Profit – Operating Expenses\nLess: Interest Expense\nInterest Expense = Interest Rate (%) × Debt\nPre-Tax Income (EBT)\nEBT = EBIT – Interest Expense\nLess: Income Taxes\nIncome Tax = Effective Tax Rate (%) × EBT\nNet Income\nNet Income = EBT – Taxes\nProfit and Loss Statement Example: Alphabet (GOOGL)\nThe profit and loss statement (P&L) of\nAlphabet (GOOGL)\n—derived from financial data platform\nDaloopa\n—is presented below to illustrate the format of an income statement.\nAlphabet, Inc. Income Statement Example (Source:\nDaloopa\n)\nProfit and Loss Statement Calculator — Excel Template\nWe’ll now move on to a modeling exercise, which you can access by filling out the form below.\nProfit and Loss Statement Calculation Example\nSuppose we’re tasked with creating a simple profit and loss statement (P&L) for a company with the following financial data.\nRevenue = $100 million\nCOGS = $40 million\nSG&A = $20 million\nInterest Expense = $5 million\nTax Rate = 30%\nGiven those assumptions, we can input each figure into our P&L statement in Excel while ensuring to abide by the industry standard formatting conventions (i.e. the\nfinancial modeling\n“best practices”).\nTherefore, the assumptions will be formatted in blue font to denote that the figure is hard-coded input, whereas the calculation metrics are formatted in black font.\nFurthermore, each cost and expense is entered as a negative figure to reflect that the line item represents an outflow of cash.\nThe formula for each profit metric on the profit and loss statement (P&L) is stated in the following list:\nGross Profit = $100 million – $40 million = $60 million\nEBIT = $60 million – $20 million = $40 million\nPre-Tax Income (EBT) = $40 million – $5 million = $35 million\nNet Income = $35 million – ($35 million × 30%) = $25 million\nIn closing, our hypothetical company’s gross profit, EBIT, and net income are $60 million, $40 million, and $25 million, respectively.\nContinue Reading Below\nStep-by-Step Online Course\nEverything You Need To Master Financial Modeling\nEnroll in The Premium Package: Learn Financial Statement Modeling, DCF, M&A,\nLBO\nand\nComps\n. The same training program used at top investment banks.\nEnroll Today","attrs_markdown":"![background](data:image\/svg+xml;base64,PD94bWwgdmVyc2lvbj0iMS4wIiBlbmNvZGluZz0iVVRGLTgiPz48c3ZnIHdpZHRoPSI5OTk5OXB4IiBoZWlnaHQ9Ijk5OTk5cHgiIHZpZXdCb3g9IjAgMCA5OTk5OSA5OTk5OSIgdmVyc2lvbj0iMS4xIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHhtbG5zOnhsaW5rPSJodHRwOi8vd3d3LnczLm9yZy8xOTk5L3hsaW5rIj48ZyBzdHJva2U9Im5vbmUiIGZpbGw9Im5vbmUiIGZpbGwtb3BhY2l0eT0iMCI+PHJlY3QgeD0iMCIgeT0iMCIgd2lkdGg9Ijk5OTk5IiBoZWlnaHQ9Ijk5OTk5Ij48L3JlY3Q+IDwvZz4gPC9zdmc+)\n\n**Welcome to Wall Street Prep\\!** Use code  at checkout for 15% off.\n\n**WSP Certificates with  Columbia & Wharton  Certificates  Now Open!  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[University Training](https:\/\/www.wallstreetprep.com\/on-campus-training\/)\n- [Free Content](https:\/\/www.wallstreetprep.com\/free-resources\/)\n- [Support\/Contact Us](https:\/\/www.wallstreetprep.com\/support\/)\n- [About Wall Street Prep](https:\/\/www.wallstreetprep.com\/about\/)\n\n- [Resources](https:\/\/www.wallstreetprep.com\/free-resources\/)\n- [Accounting](https:\/\/www.wallstreetprep.com\/topics\/accounting\/)\n- Profit and Loss Statement (P\\&L)\n# Profit and Loss Statement (P\\&L)\nStep-by-Step Guide to Understanding the Profit and Loss Statement (P\\&L)\n\nUpdated Jun. 23, 2024\n\n4m Read Time\n\nPart of the Guide On...\n\nIncome Statement\n\nPart of the Guide On:   \n Income Statement\n\nIncome Statement Fundamental Concepts\n\nProfit and Loss Statement (P\\&L)[Multi-Step Income Statement](https:\/\/www.wallstreetprep.com\/knowledge\/multi-step-income-statement\/)[Annual Income](https:\/\/www.wallstreetprep.com\/knowledge\/annual-income\/)\n\nRevenue (Sales)\n\n[Net Revenue](https:\/\/www.wallstreetprep.com\/knowledge\/net-revenue\/)[Gross Sales](https:\/\/www.wallstreetprep.com\/knowledge\/gross-sales\/)[Credit Sales](https:\/\/www.wallstreetprep.com\/knowledge\/credit-sales\/)[Gross vs. Net Income](https:\/\/www.wallstreetprep.com\/knowledge\/gross-vs-net-income\/)\n\nProfitability Metrics\n\n[Gross Profit](https:\/\/www.wallstreetprep.com\/knowledge\/gross-profit\/)[Operating Profit](https:\/\/www.wallstreetprep.com\/knowledge\/operating-profit\/)[EBIT](https:\/\/www.wallstreetprep.com\/knowledge\/ebit\/)[Pre-Tax Income (EBT)](https:\/\/www.wallstreetprep.com\/knowledge\/pre-tax-income\/)[Net Income](https:\/\/www.wallstreetprep.com\/knowledge\/net-income\/)[Adjusted Net Income](https:\/\/www.wallstreetprep.com\/knowledge\/adjusted-net-income\/)\n\nOperating Costs\n\n[Cost of Goods Sold (COGS)](https:\/\/www.wallstreetprep.com\/knowledge\/cogs-cost-of-goods-sold\/)[Cost of Goods Manufactured (COGM)](https:\/\/www.wallstreetprep.com\/knowledge\/cogm-cost-of-goods-manufactured\/)[Operating Expenses](https:\/\/www.wallstreetprep.com\/knowledge\/operating-expenses\/)[SG\\&A Expense](https:\/\/www.wallstreetprep.com\/knowledge\/selling-general-administrative-sga\/)[Research and Development (R\\&D)](https:\/\/www.wallstreetprep.com\/knowledge\/research-development\/)[Overhead Costs](https:\/\/www.wallstreetprep.com\/knowledge\/overhead-costs\/)[COGS vs. Operating Expenses](https:\/\/www.wallstreetprep.com\/knowledge\/cogs-vs-operating-expenses\/)[Direct vs. Indirect Costs](https:\/\/www.wallstreetprep.com\/knowledge\/direct-vs-indirect-costs\/)\n\nNon-Operating Items\n\n[Interest Expense](https:\/\/www.wallstreetprep.com\/knowledge\/interest-expense\/)[Interest Income](https:\/\/www.wallstreetprep.com\/knowledge\/interest-income\/)[Net Interest Income (NII)](https:\/\/www.wallstreetprep.com\/knowledge\/net-interest-income\/)[Net Interest Margin (NIM)](https:\/\/www.wallstreetprep.com\/knowledge\/net-interest-margin-nim\/)[Inventory Write-Down](https:\/\/www.wallstreetprep.com\/knowledge\/inventory-write-down\/)[Inventory Write-Off](https:\/\/www.wallstreetprep.com\/knowledge\/inventory-write-off\/)[Discontinued Operations](https:\/\/www.wallstreetprep.com\/knowledge\/discontinued-operations\/)\n\nIncome Taxes\n\n[Effective Tax Rate](https:\/\/www.wallstreetprep.com\/knowledge\/effective-tax-rate\/)[Effective vs Marginal Tax Rates](https:\/\/www.wallstreetprep.com\/knowledge\/can-you-please-explain-the-difference-between-effective-tax-rate-and-marginal-tax-rate\/)[Net Operating Loss (NOL)](https:\/\/www.wallstreetprep.com\/knowledge\/net-operating-loss-nol\/)\n\nShares Outstanding\n\n[Shares Outstanding](https:\/\/www.wallstreetprep.com\/knowledge\/shares-outstanding\/)[Weighted Average Shares Outstanding](https:\/\/www.wallstreetprep.com\/knowledge\/weighted-average-shares-outstanding\/)[Treasury Stock Method (TSM)](https:\/\/www.wallstreetprep.com\/knowledge\/treasury-stock-method\/)[Stock Based Compensation (SBC)](https:\/\/www.wallstreetprep.com\/knowledge\/stock-based-compensation-sbc\/)[Restricted Stock Units (RSUs)](https:\/\/www.wallstreetprep.com\/knowledge\/restricted-stock-units-rsus\/)[Stock Split](https:\/\/www.wallstreetprep.com\/knowledge\/stock-split\/)[Reverse Stock Split](https:\/\/www.wallstreetprep.com\/knowledge\/reverse-stock-split\/)\n\nEarnings Per Share (EPS)\n\n[Earnings Per Share (EPS)](https:\/\/www.wallstreetprep.com\/knowledge\/earnings-per-share-eps\/)[Basic Earnings Per Share (EPS)](https:\/\/www.wallstreetprep.com\/knowledge\/basic-eps-earnings-per-share\/)[Diluted Earnings Per Share (EPS)](https:\/\/www.wallstreetprep.com\/knowledge\/diluted-eps-earnings-per-share\/)[Cash EPS](https:\/\/www.wallstreetprep.com\/knowledge\/cash-eps\/)\n\nTable of Contents\n\n1. [What is Profit and Loss Statement?](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_1)\n2. [How to Read a Profit and Loss Statement](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_2)\n3. [How to Prepare Profit and Loss Statement (P\\&L)](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_3)\n4. [What is the Format of a P\\&L Statement?](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_4)\n5. [Profit and Loss Statement Example: Alphabet (GOOGL)](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_5)\n6. [Profit and Loss Statement Calculator — Excel Template](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_6)\n7. [Profit and Loss Statement Calculation Example](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_7)\n\n## What is Profit and Loss Statement?\nThe **Profit and Loss Statement (P\\&L)** is a financial statement that starts with revenue and deducts costs and expenses to arrive at net income, the profitability of a company, in a specified period.\n\nThe P\\&L statement—or “Income Statement”—is a financial report that summarizes a particular company’s revenue, costs, and expenses across a stated period.\n\n![Profit and Loss Statement (P\\&L)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/23051833\/Profit-and-Loss-Statement-PL-960x507.jpg)\n\n## How to Read a Profit and Loss Statement\nThe profit and loss statement—or “P\\&L Statement”—is one of the three core financial statements that publicly traded companies are obligated to file with the SEC.\n\nFor public companies listed in the U.S., the [10-Q](https:\/\/www.wallstreetprep.com\/knowledge\/10-q-filing\/) profit and loss statement (P\\&L), often used interchangeably with the term “Income Statement”, must be filed each quarter, with a [10-K](https:\/\/www.wallstreetprep.com\/knowledge\/10-k-filing\/) annual filing due for the 4th quarter.\n\n- **Quarterly Filing (10-Q) ➝** 3x Per Year (and 4th is 10-K)\n- **Annual Filing (10-K) ➝** 1x Per Year\n\nTogether, alongside the [cash flow statement (CFS)](https:\/\/www.wallstreetprep.com\/knowledge\/cash-flow-statement\/) and [balance sheet (B\/S)](https:\/\/www.wallstreetprep.com\/knowledge\/balance-sheet\/), the P\\&L statement provides a detailed depiction of the financial state of a company.\n\nIn particular, the P\\&L statement shows the [operating performance](https:\/\/www.wallstreetprep.com\/knowledge\/ebitda\/) of the company as well as the costs and expenses that impact its [profit margins](https:\/\/www.wallstreetprep.com\/knowledge\/profit-margin\/).\n\nUpon assessing a company’s P\\&L statement, one can gauge the company’s ability to:\n\n- **Generate Revenue ➝** Improve Sales Growth (“Top Line”)\n- **Optimize Operating Structure ➝** Reduce Cost of Goods Sold (COGS) and Operating Costs (SG\\&A, R\\&D)\n- **Increase Profitability** → Higher Gross Margin, Contribution Margin (CM), Operating Profit Margin, EBITDA Margin, and Net Profit Margin\n## How to Prepare Profit and Loss Statement (P\\&L)\nThe profit and loss statement (P\\&L) can be prepared by an accountant under two different methods:\n\n- **Accrual Accounting (U.S. GAAP) ➝** Under the revenue recognition principle (ASC 606), revenue is recognized when “earned” under GAAP standards (i.e. product or service delivered to the customer regardless of whether [cash](https:\/\/www.wallstreetprep.com\/knowledge\/cash-equivalents\/) payment was received). Expenses are matched in the same period as the corresponding revenue they helped create, which is called the matching principle. The income statement filed with the SEC must abide by U.S. GAAP reporting standards.\n- **Cash Basis Accounting ➝** Under cash basis accounting, revenue is not recognized until the customer pays in cash to the company for the products or services received. Expenses under cash accounting, similar to revenue, are not recognized until the cash outflow occurs – meaning that the company has actually paid the third party in cash. The income statement prepared under cash-basis accounting are more common for private companies.\n## What is the Format of a P\\&L Statement?\nThe standard profit and loss statement (P\\&L) format will consist of the following line items:\n\n| Income Statement | Line Items |\n|---|---|\n| Net Revenue | Net Revenue = Gross Revenue – Returns – Discounts – Sales Allowances |\n| Less: Cost of Goods Sold (COGS) | Cost of Goods Sold (COGS) = Beginning Inventory + Purchases in the Current Period – Ending Inventory |\n| [Gross Profit](https:\/\/www.wallstreetprep.com\/knowledge\/gross-profit\/) | Gross Profit = Revenue – COGS |\n| Less: Operating Expenses (Opex) | Operating Expenses = Σ SG\\&A, R\\&D |\n| Operating Income ([EBIT](https:\/\/www.wallstreetprep.com\/knowledge\/ebit\/)) | EBIT = Gross Profit – Operating Expenses |\n| Less: Interest Expense | Interest Expense = Interest Rate (%) × Debt |\n| Pre-Tax Income (EBT) | EBT = EBIT – Interest Expense |\n| Less: Income Taxes | Income Tax = Effective Tax Rate (%) × EBT |\n| [Net Income](https:\/\/www.wallstreetprep.com\/knowledge\/net-income\/) | Net Income = EBT – Taxes |\n## Profit and Loss Statement Example: Alphabet (GOOGL)\nThe profit and loss statement (P\\&L) of [Alphabet (GOOGL)](https:\/\/abc.xyz\/investor\/)—derived from financial data platform [Daloopa](https:\/\/hubs.ly\/Q02t-L550)—is presented below to illustrate the format of an income statement.\n\n[![Income Statement Example (P\\&L)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/21224029\/Income-Statement-Example-PL-scaled.jpg)](https:\/\/hubs.ly\/Q02t-L550)\n\nAlphabet, Inc. Income Statement Example (Source: [Daloopa](https:\/\/hubs.ly\/Q02t-L550))\n\n## Profit and Loss Statement Calculator — Excel Template\nWe’ll now move on to a modeling exercise, which you can access by filling out the form below.\n\n## Profit and Loss Statement Calculation Example\nSuppose we’re tasked with creating a simple profit and loss statement (P\\&L) for a company with the following financial data.\n\n- Revenue = \\$100 million\n- COGS = \\$40 million\n- SG\\&A = \\$20 million\n- Interest Expense = \\$5 million\n- Tax Rate = 30%\n\nGiven those assumptions, we can input each figure into our P\\&L statement in Excel while ensuring to abide by the industry standard formatting conventions (i.e. the [financial modeling](https:\/\/www.wallstreetprep.com\/knowledge\/financial-modeling\/) “best practices”).\n\nTherefore, the assumptions will be formatted in blue font to denote that the figure is hard-coded input, whereas the calculation metrics are formatted in black font.\n\nFurthermore, each cost and expense is entered as a negative figure to reflect that the line item represents an outflow of cash.\n\nThe formula for each profit metric on the profit and loss statement (P\\&L) is stated in the following list:\n\n- Gross Profit = \\$100 million – \\$40 million = \\$60 million\n- EBIT = \\$60 million – \\$20 million = \\$40 million\n- Pre-Tax Income (EBT) = \\$40 million – \\$5 million = \\$35 million\n- Net Income = \\$35 million – (\\$35 million × 30%) = \\$25 million\n\nIn closing, our hypothetical company’s gross profit, EBIT, and net income are \\$60 million, \\$40 million, and \\$25 million, respectively.\n\n[![Profit and Loss Statement Template Example ((P\\&L)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/25232039\/Profit-and-Loss-Statement-PL-Example-Template.jpg)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/25232039\/Profit-and-Loss-Statement-PL-Example-Template.jpg)\n\nContinue Reading Below\n\n![salesbanner laptop premium cert ](https:\/\/media.wallstreetprep.com\/wspimage\/salesbanner_laptop_premium_cert_900.png)\n\nStep-by-Step Online Course\n\n### Everything You Need To Master Financial Modeling\nEnroll in The Premium Package: Learn Financial Statement Modeling, DCF, M\\&A, [LBO](https:\/\/www.wallstreetprep.com\/knowledge\/lbo-modeling-test-example-solutions\/) and [Comps](https:\/\/www.wallstreetprep.com\/knowledge\/comparable-company-analysis-comps\/). 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All Rights Reserved\n\nInsert\n\nYou are going to send email to\n\nSend\n\nMove Comment\n\nMove\n\n![](https:\/\/www.facebook.com\/tr?id=277538809950075&ev=PageView&noscript=1)","attrs_readable_markdown":"1. [What is Profit and Loss Statement?](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_1)\n2. [How to Read a Profit and Loss Statement](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_2)\n3. [How to Prepare Profit and Loss Statement (P\\&L)](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_3)\n4. [What is the Format of a P\\&L Statement?](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_4)\n5. [Profit and Loss Statement Example: Alphabet (GOOGL)](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_5)\n6. [Profit and Loss Statement Calculator — Excel Template](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_6)\n7. [Profit and Loss Statement Calculation Example](https:\/\/www.wallstreetprep.com\/knowledge\/profit-loss\/#h2_7)\n\nThe **Profit and Loss Statement (P\\&L)** is a financial statement that starts with revenue and deducts costs and expenses to arrive at net income, the profitability of a company, in a specified period.\n\nThe P\\&L statement—or “Income Statement”—is a financial report that summarizes a particular company’s revenue, costs, and expenses across a stated period.\n\n![Profit and Loss Statement (P\\&L)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/23051833\/Profit-and-Loss-Statement-PL-960x507.jpg)\n\n## How to Read a Profit and Loss Statement\nThe profit and loss statement—or “P\\&L Statement”—is one of the three core financial statements that publicly traded companies are obligated to file with the SEC.\n\nFor public companies listed in the U.S., the [10-Q](https:\/\/www.wallstreetprep.com\/knowledge\/10-q-filing\/) profit and loss statement (P\\&L), often used interchangeably with the term “Income Statement”, must be filed each quarter, with a [10-K](https:\/\/www.wallstreetprep.com\/knowledge\/10-k-filing\/) annual filing due for the 4th quarter.\n\n- **Quarterly Filing (10-Q) ➝** 3x Per Year (and 4th is 10-K)\n- **Annual Filing (10-K) ➝** 1x Per Year\n\nTogether, alongside the [cash flow statement (CFS)](https:\/\/www.wallstreetprep.com\/knowledge\/cash-flow-statement\/) and [balance sheet (B\/S)](https:\/\/www.wallstreetprep.com\/knowledge\/balance-sheet\/), the P\\&L statement provides a detailed depiction of the financial state of a company.\n\nIn particular, the P\\&L statement shows the [operating performance](https:\/\/www.wallstreetprep.com\/knowledge\/ebitda\/) of the company as well as the costs and expenses that impact its [profit margins](https:\/\/www.wallstreetprep.com\/knowledge\/profit-margin\/).\n\nUpon assessing a company’s P\\&L statement, one can gauge the company’s ability to:\n\n- **Generate Revenue ➝** Improve Sales Growth (“Top Line”)\n- **Optimize Operating Structure ➝** Reduce Cost of Goods Sold (COGS) and Operating Costs (SG\\&A, R\\&D)\n- **Increase Profitability** → Higher Gross Margin, Contribution Margin (CM), Operating Profit Margin, EBITDA Margin, and Net Profit Margin\n## How to Prepare Profit and Loss Statement (P\\&L)\nThe profit and loss statement (P\\&L) can be prepared by an accountant under two different methods:\n\n- **Accrual Accounting (U.S. GAAP) ➝** Under the revenue recognition principle (ASC 606), revenue is recognized when “earned” under GAAP standards (i.e. product or service delivered to the customer regardless of whether [cash](https:\/\/www.wallstreetprep.com\/knowledge\/cash-equivalents\/) payment was received). Expenses are matched in the same period as the corresponding revenue they helped create, which is called the matching principle. The income statement filed with the SEC must abide by U.S. GAAP reporting standards.\n- **Cash Basis Accounting ➝** Under cash basis accounting, revenue is not recognized until the customer pays in cash to the company for the products or services received. Expenses under cash accounting, similar to revenue, are not recognized until the cash outflow occurs – meaning that the company has actually paid the third party in cash. The income statement prepared under cash-basis accounting are more common for private companies.\n## What is the Format of a P\\&L Statement?\nThe standard profit and loss statement (P\\&L) format will consist of the following line items:\n\n| Income Statement | Line Items |\n|---|---|\n| Net Revenue | Net Revenue = Gross Revenue – Returns – Discounts – Sales Allowances |\n| Less: Cost of Goods Sold (COGS) | Cost of Goods Sold (COGS) = Beginning Inventory + Purchases in the Current Period – Ending Inventory |\n| [Gross Profit](https:\/\/www.wallstreetprep.com\/knowledge\/gross-profit\/) | Gross Profit = Revenue – COGS |\n| Less: Operating Expenses (Opex) | Operating Expenses = Σ SG\\&A, R\\&D |\n| Operating Income ([EBIT](https:\/\/www.wallstreetprep.com\/knowledge\/ebit\/)) | EBIT = Gross Profit – Operating Expenses |\n| Less: Interest Expense | Interest Expense = Interest Rate (%) × Debt |\n| Pre-Tax Income (EBT) | EBT = EBIT – Interest Expense |\n| Less: Income Taxes | Income Tax = Effective Tax Rate (%) × EBT |\n| [Net Income](https:\/\/www.wallstreetprep.com\/knowledge\/net-income\/) | Net Income = EBT – Taxes |\n## Profit and Loss Statement Example: Alphabet (GOOGL)\nThe profit and loss statement (P\\&L) of [Alphabet (GOOGL)](https:\/\/abc.xyz\/investor\/)—derived from financial data platform [Daloopa](https:\/\/hubs.ly\/Q02t-L550)—is presented below to illustrate the format of an income statement.\n\n[![Income Statement Example (P\\&L)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/21224029\/Income-Statement-Example-PL-scaled.jpg)](https:\/\/hubs.ly\/Q02t-L550)\n\nAlphabet, Inc. Income Statement Example (Source: [Daloopa](https:\/\/hubs.ly\/Q02t-L550))\n\n## Profit and Loss Statement Calculator — Excel Template\nWe’ll now move on to a modeling exercise, which you can access by filling out the form below.\n\n## Profit and Loss Statement Calculation Example\nSuppose we’re tasked with creating a simple profit and loss statement (P\\&L) for a company with the following financial data.\n\n- Revenue = \\$100 million\n- COGS = \\$40 million\n- SG\\&A = \\$20 million\n- Interest Expense = \\$5 million\n- Tax Rate = 30%\n\nGiven those assumptions, we can input each figure into our P\\&L statement in Excel while ensuring to abide by the industry standard formatting conventions (i.e. the [financial modeling](https:\/\/www.wallstreetprep.com\/knowledge\/financial-modeling\/) “best practices”).\n\nTherefore, the assumptions will be formatted in blue font to denote that the figure is hard-coded input, whereas the calculation metrics are formatted in black font.\n\nFurthermore, each cost and expense is entered as a negative figure to reflect that the line item represents an outflow of cash.\n\nThe formula for each profit metric on the profit and loss statement (P\\&L) is stated in the following list:\n\n- Gross Profit = \\$100 million – \\$40 million = \\$60 million\n- EBIT = \\$60 million – \\$20 million = \\$40 million\n- Pre-Tax Income (EBT) = \\$40 million – \\$5 million = \\$35 million\n- Net Income = \\$35 million – (\\$35 million × 30%) = \\$25 million\n\nIn closing, our hypothetical company’s gross profit, EBIT, and net income are \\$60 million, \\$40 million, and \\$25 million, respectively.\n\n[![Profit and Loss Statement Template Example ((P\\&L)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/25232039\/Profit-and-Loss-Statement-PL-Example-Template.jpg)](https:\/\/media.wallstreetprep.com\/uploads\/2022\/01\/25232039\/Profit-and-Loss-Statement-PL-Example-Template.jpg)\n\nContinue Reading Below\n\n![salesbanner laptop premium cert ](https:\/\/media.wallstreetprep.com\/wspimage\/salesbanner_laptop_premium_cert_900.png)\n\nStep-by-Step Online Course\n\n### Everything You Need To Master Financial Modeling\nEnroll in The Premium Package: Learn Financial Statement Modeling, DCF, M\\&A, [LBO](https:\/\/www.wallstreetprep.com\/knowledge\/lbo-modeling-test-example-solutions\/) and [Comps](https:\/\/www.wallstreetprep.com\/knowledge\/comparable-company-analysis-comps\/). The same training program used at top investment banks.\n\n[Enroll Today](https:\/\/www.wallstreetprep.com\/self-study-programs\/premium-package\/)","meta_canonical":null}

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Boilerpipe Text	What is Profit and Loss Statement? How to Read a Profit and Loss Statement How to Prepare Profit and Loss Statement (P&L) What is the Format of a P&L Statement? Profit and Loss Statement Example: Alphabet (GOOGL) Profit and Loss Statement Calculator — Excel Template Profit and Loss Statement Calculation Example The Profit and Loss Statement (P&L) is a financial statement that starts with revenue and deducts costs and expenses to arrive at net income, the profitability of a company, in a specified period. The P&L statement—or “Income Statement”—is a financial report that summarizes a particular company’s revenue, costs, and expenses across a stated period. How to Read a Profit and Loss Statement The profit and loss statement—or “P&L Statement”—is one of the three core financial statements that publicly traded companies are obligated to file with the SEC. For public companies listed in the U.S., the 10-Q profit and loss statement (P&L), often used interchangeably with the term “Income Statement”, must be filed each quarter, with a 10-K annual filing due for the 4 th quarter. Quarterly Filing (10-Q) ➝ 3x Per Year (and 4th is 10-K) Annual Filing (10-K) ➝ 1x Per Year Together, alongside the cash flow statement (CFS) and balance sheet (B/S) , the P&L statement provides a detailed depiction of the financial state of a company. In particular, the P&L statement shows the operating performance of the company as well as the costs and expenses that impact its profit margins . Upon assessing a company’s P&L statement, one can gauge the company’s ability to: Generate Revenue ➝ Improve Sales Growth (“Top Line”) Optimize Operating Structure ➝ Reduce Cost of Goods Sold (COGS) and Operating Costs (SG&A, R&D) Increase Profitability → Higher Gross Margin, Contribution Margin (CM), Operating Profit Margin, EBITDA Margin, and Net Profit Margin How to Prepare Profit and Loss Statement (P&L) The profit and loss statement (P&L) can be prepared by an accountant under two different methods: Accrual Accounting (U.S. GAAP) ➝ Under the revenue recognition principle (ASC 606), revenue is recognized when “earned” under GAAP standards (i.e. product or service delivered to the customer regardless of whether cash payment was received). Expenses are matched in the same period as the corresponding revenue they helped create, which is called the matching principle. The income statement filed with the SEC must abide by U.S. GAAP reporting standards. Cash Basis Accounting ➝ Under cash basis accounting, revenue is not recognized until the customer pays in cash to the company for the products or services received. Expenses under cash accounting, similar to revenue, are not recognized until the cash outflow occurs – meaning that the company has actually paid the third party in cash. The income statement prepared under cash-basis accounting are more common for private companies. What is the Format of a P&L Statement? The standard profit and loss statement (P&L) format will consist of the following line items: Income Statement Line Items Net Revenue Net Revenue = Gross Revenue – Returns – Discounts – Sales Allowances Less: Cost of Goods Sold (COGS) Cost of Goods Sold (COGS) = Beginning Inventory + Purchases in the Current Period – Ending Inventory Gross Profit Gross Profit = Revenue – COGS Less: Operating Expenses (Opex) Operating Expenses = Σ SG&A, R&D Operating Income ( EBIT ) EBIT = Gross Profit – Operating Expenses Less: Interest Expense Interest Expense = Interest Rate (%) × Debt Pre-Tax Income (EBT) EBT = EBIT – Interest Expense Less: Income Taxes Income Tax = Effective Tax Rate (%) × EBT Net Income Net Income = EBT – Taxes Profit and Loss Statement Example: Alphabet (GOOGL) The profit and loss statement (P&L) of Alphabet (GOOGL) —derived from financial data platform Daloopa —is presented below to illustrate the format of an income statement. Alphabet, Inc. Income Statement Example (Source: Daloopa ) Profit and Loss Statement Calculator — Excel Template We’ll now move on to a modeling exercise, which you can access by filling out the form below. Profit and Loss Statement Calculation Example Suppose we’re tasked with creating a simple profit and loss statement (P&L) for a company with the following financial data. Revenue = $100 million COGS = $40 million SG&A = $20 million Interest Expense = $5 million Tax Rate = 30% Given those assumptions, we can input each figure into our P&L statement in Excel while ensuring to abide by the industry standard formatting conventions (i.e. the financial modeling “best practices”). Therefore, the assumptions will be formatted in blue font to denote that the figure is hard-coded input, whereas the calculation metrics are formatted in black font. Furthermore, each cost and expense is entered as a negative figure to reflect that the line item represents an outflow of cash. The formula for each profit metric on the profit and loss statement (P&L) is stated in the following list: Gross Profit = $100 million – $40 million = $60 million EBIT = $60 million – $20 million = $40 million Pre-Tax Income (EBT) = $40 million – $5 million = $35 million Net Income = $35 million – ($35 million × 30%) = $25 million In closing, our hypothetical company’s gross profit, EBIT, and net income are $60 million, $40 million, and $25 million, respectively. Continue Reading Below Step-by-Step Online Course Everything You Need To Master Financial Modeling Enroll in The Premium Package: Learn Financial Statement Modeling, DCF, M&A, LBO and Comps . The same training program used at top investment banks. Enroll Today
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Income Statement Part of the Guide On: Income Statement Income Statement Fundamental Concepts Profit and Loss Statement (P\&L)[Multi-Step Income Statement](https://www.wallstreetprep.com/knowledge/multi-step-income-statement/)[Annual Income](https://www.wallstreetprep.com/knowledge/annual-income/) Revenue (Sales) [Net Revenue](https://www.wallstreetprep.com/knowledge/net-revenue/)[Gross Sales](https://www.wallstreetprep.com/knowledge/gross-sales/)[Credit Sales](https://www.wallstreetprep.com/knowledge/credit-sales/)[Gross vs. Net Income](https://www.wallstreetprep.com/knowledge/gross-vs-net-income/) Profitability Metrics [Gross Profit](https://www.wallstreetprep.com/knowledge/gross-profit/)[Operating Profit](https://www.wallstreetprep.com/knowledge/operating-profit/)[EBIT](https://www.wallstreetprep.com/knowledge/ebit/)[Pre-Tax Income (EBT)](https://www.wallstreetprep.com/knowledge/pre-tax-income/)[Net Income](https://www.wallstreetprep.com/knowledge/net-income/)[Adjusted Net Income](https://www.wallstreetprep.com/knowledge/adjusted-net-income/) Operating Costs [Cost of Goods Sold (COGS)](https://www.wallstreetprep.com/knowledge/cogs-cost-of-goods-sold/)[Cost of Goods Manufactured (COGM)](https://www.wallstreetprep.com/knowledge/cogm-cost-of-goods-manufactured/)[Operating Expenses](https://www.wallstreetprep.com/knowledge/operating-expenses/)[SG\&A Expense](https://www.wallstreetprep.com/knowledge/selling-general-administrative-sga/)[Research and Development (R\&D)](https://www.wallstreetprep.com/knowledge/research-development/)[Overhead Costs](https://www.wallstreetprep.com/knowledge/overhead-costs/)[COGS vs. Operating Expenses](https://www.wallstreetprep.com/knowledge/cogs-vs-operating-expenses/)[Direct vs. Indirect Costs](https://www.wallstreetprep.com/knowledge/direct-vs-indirect-costs/) Non-Operating Items [Interest Expense](https://www.wallstreetprep.com/knowledge/interest-expense/)[Interest Income](https://www.wallstreetprep.com/knowledge/interest-income/)[Net Interest Income (NII)](https://www.wallstreetprep.com/knowledge/net-interest-income/)[Net Interest Margin (NIM)](https://www.wallstreetprep.com/knowledge/net-interest-margin-nim/)[Inventory Write-Down](https://www.wallstreetprep.com/knowledge/inventory-write-down/)[Inventory Write-Off](https://www.wallstreetprep.com/knowledge/inventory-write-off/)[Discontinued Operations](https://www.wallstreetprep.com/knowledge/discontinued-operations/) Income Taxes [Effective Tax Rate](https://www.wallstreetprep.com/knowledge/effective-tax-rate/)[Effective vs Marginal Tax Rates](https://www.wallstreetprep.com/knowledge/can-you-please-explain-the-difference-between-effective-tax-rate-and-marginal-tax-rate/)[Net Operating Loss (NOL)](https://www.wallstreetprep.com/knowledge/net-operating-loss-nol/) Shares Outstanding [Shares Outstanding](https://www.wallstreetprep.com/knowledge/shares-outstanding/)[Weighted Average Shares Outstanding](https://www.wallstreetprep.com/knowledge/weighted-average-shares-outstanding/)[Treasury Stock Method (TSM)](https://www.wallstreetprep.com/knowledge/treasury-stock-method/)[Stock Based Compensation (SBC)](https://www.wallstreetprep.com/knowledge/stock-based-compensation-sbc/)[Restricted Stock Units (RSUs)](https://www.wallstreetprep.com/knowledge/restricted-stock-units-rsus/)[Stock Split](https://www.wallstreetprep.com/knowledge/stock-split/)[Reverse Stock Split](https://www.wallstreetprep.com/knowledge/reverse-stock-split/) Earnings Per Share (EPS) [Earnings Per Share (EPS)](https://www.wallstreetprep.com/knowledge/earnings-per-share-eps/)[Basic Earnings Per Share (EPS)](https://www.wallstreetprep.com/knowledge/basic-eps-earnings-per-share/)[Diluted Earnings Per Share (EPS)](https://www.wallstreetprep.com/knowledge/diluted-eps-earnings-per-share/)[Cash EPS](https://www.wallstreetprep.com/knowledge/cash-eps/) Table of Contents 1. [What is Profit and Loss Statement?](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_1) 2. [How to Read a Profit and Loss Statement](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_2) 3. [How to Prepare Profit and Loss Statement (P\&L)](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_3) 4. [What is the Format of a P\&L Statement?](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_4) 5. [Profit and Loss Statement Example: Alphabet (GOOGL)](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_5) 6. [Profit and Loss Statement Calculator — Excel Template](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_6) 7. [Profit and Loss Statement Calculation Example](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_7) ## What is Profit and Loss Statement? The Profit and Loss Statement (P\&L) is a financial statement that starts with revenue and deducts costs and expenses to arrive at net income, the profitability of a company, in a specified period. The P\&L statement—or “Income Statement”—is a financial report that summarizes a particular company’s revenue, costs, and expenses across a stated period. ![Profit and Loss Statement (P\&L)](https://media.wallstreetprep.com/uploads/2022/01/23051833/Profit-and-Loss-Statement-PL-960x507.jpg) ## How to Read a Profit and Loss Statement The profit and loss statement—or “P\&L Statement”—is one of the three core financial statements that publicly traded companies are obligated to file with the SEC. For public companies listed in the U.S., the [10-Q](https://www.wallstreetprep.com/knowledge/10-q-filing/) profit and loss statement (P\&L), often used interchangeably with the term “Income Statement”, must be filed each quarter, with a [10-K](https://www.wallstreetprep.com/knowledge/10-k-filing/) annual filing due for the 4th quarter. - Quarterly Filing (10-Q) ➝ 3x Per Year (and 4th is 10-K) - Annual Filing (10-K) ➝ 1x Per Year Together, alongside the [cash flow statement (CFS)](https://www.wallstreetprep.com/knowledge/cash-flow-statement/) and [balance sheet (B/S)](https://www.wallstreetprep.com/knowledge/balance-sheet/), the P\&L statement provides a detailed depiction of the financial state of a company. In particular, the P\&L statement shows the [operating performance](https://www.wallstreetprep.com/knowledge/ebitda/) of the company as well as the costs and expenses that impact its [profit margins](https://www.wallstreetprep.com/knowledge/profit-margin/). Upon assessing a company’s P\&L statement, one can gauge the company’s ability to: - Generate Revenue ➝ Improve Sales Growth (“Top Line”) - Optimize Operating Structure ➝ Reduce Cost of Goods Sold (COGS) and Operating Costs (SG\&A, R\&D) - Increase Profitability → Higher Gross Margin, Contribution Margin (CM), Operating Profit Margin, EBITDA Margin, and Net Profit Margin ## How to Prepare Profit and Loss Statement (P\&L) The profit and loss statement (P\&L) can be prepared by an accountant under two different methods: - Accrual Accounting (U.S. GAAP) ➝ Under the revenue recognition principle (ASC 606), revenue is recognized when “earned” under GAAP standards (i.e. product or service delivered to the customer regardless of whether [cash](https://www.wallstreetprep.com/knowledge/cash-equivalents/) payment was received). Expenses are matched in the same period as the corresponding revenue they helped create, which is called the matching principle. The income statement filed with the SEC must abide by U.S. GAAP reporting standards. - Cash Basis Accounting ➝ Under cash basis accounting, revenue is not recognized until the customer pays in cash to the company for the products or services received. Expenses under cash accounting, similar to revenue, are not recognized until the cash outflow occurs – meaning that the company has actually paid the third party in cash. The income statement prepared under cash-basis accounting are more common for private companies. ## What is the Format of a P\&L Statement? The standard profit and loss statement (P\&L) format will consist of the following line items: \| Income Statement \| Line Items \| \|---\|---\| \| Net Revenue \| Net Revenue = Gross Revenue – Returns – Discounts – Sales Allowances \| \| Less: Cost of Goods Sold (COGS) \| Cost of Goods Sold (COGS) = Beginning Inventory + Purchases in the Current Period – Ending Inventory \| \| [Gross Profit](https://www.wallstreetprep.com/knowledge/gross-profit/) \| Gross Profit = Revenue – COGS \| \| Less: Operating Expenses (Opex) \| Operating Expenses = Σ SG\&A, R\&D \| \| Operating Income ([EBIT](https://www.wallstreetprep.com/knowledge/ebit/)) \| EBIT = Gross Profit – Operating Expenses \| \| Less: Interest Expense \| Interest Expense = Interest Rate (%) × Debt \| \| Pre-Tax Income (EBT) \| EBT = EBIT – Interest Expense \| \| Less: Income Taxes \| Income Tax = Effective Tax Rate (%) × EBT \| \| [Net Income](https://www.wallstreetprep.com/knowledge/net-income/) \| Net Income = EBT – Taxes \| ## Profit and Loss Statement Example: Alphabet (GOOGL) The profit and loss statement (P\&L) of [Alphabet (GOOGL)](https://abc.xyz/investor/)—derived from financial data platform [Daloopa](https://hubs.ly/Q02t-L550)—is presented below to illustrate the format of an income statement. [![Income Statement Example (P\&L)](https://media.wallstreetprep.com/uploads/2022/01/21224029/Income-Statement-Example-PL-scaled.jpg)](https://hubs.ly/Q02t-L550) Alphabet, Inc. Income Statement Example (Source: [Daloopa](https://hubs.ly/Q02t-L550)) ## Profit and Loss Statement Calculator — Excel Template We’ll now move on to a modeling exercise, which you can access by filling out the form below. ## Profit and Loss Statement Calculation Example Suppose we’re tasked with creating a simple profit and loss statement (P\&L) for a company with the following financial data. - Revenue = \$100 million - COGS = \$40 million - SG\&A = \$20 million - Interest Expense = \$5 million - Tax Rate = 30% Given those assumptions, we can input each figure into our P\&L statement in Excel while ensuring to abide by the industry standard formatting conventions (i.e. the [financial modeling](https://www.wallstreetprep.com/knowledge/financial-modeling/) “best practices”). Therefore, the assumptions will be formatted in blue font to denote that the figure is hard-coded input, whereas the calculation metrics are formatted in black font. Furthermore, each cost and expense is entered as a negative figure to reflect that the line item represents an outflow of cash. The formula for each profit metric on the profit and loss statement (P\&L) is stated in the following list: - Gross Profit = \$100 million – \$40 million = \$60 million - EBIT = \$60 million – \$20 million = \$40 million - Pre-Tax Income (EBT) = \$40 million – \$5 million = \$35 million - Net Income = \$35 million – (\$35 million × 30%) = \$25 million In closing, our hypothetical company’s gross profit, EBIT, and net income are \$60 million, \$40 million, and \$25 million, respectively. [![Profit and Loss Statement Template Example ((P\&L)](https://media.wallstreetprep.com/uploads/2022/01/25232039/Profit-and-Loss-Statement-PL-Example-Template.jpg)](https://media.wallstreetprep.com/uploads/2022/01/25232039/Profit-and-Loss-Statement-PL-Example-Template.jpg) Continue Reading Below ![salesbanner laptop premium cert ](https://media.wallstreetprep.com/wspimage/salesbanner_laptop_premium_cert_900.png) Step-by-Step Online Course ### Everything You Need To Master Financial Modeling Enroll in The Premium Package: Learn Financial Statement Modeling, DCF, M\&A, [LBO](https://www.wallstreetprep.com/knowledge/lbo-modeling-test-example-solutions/) and [Comps](https://www.wallstreetprep.com/knowledge/comparable-company-analysis-comps/). The same training program used at top investment banks. 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Readable Markdown	1. [What is Profit and Loss Statement?](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_1) 2. [How to Read a Profit and Loss Statement](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_2) 3. [How to Prepare Profit and Loss Statement (P\&L)](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_3) 4. [What is the Format of a P\&L Statement?](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_4) 5. [Profit and Loss Statement Example: Alphabet (GOOGL)](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_5) 6. [Profit and Loss Statement Calculator — Excel Template](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_6) 7. [Profit and Loss Statement Calculation Example](https://www.wallstreetprep.com/knowledge/profit-loss/#h2_7) The Profit and Loss Statement (P\&L) is a financial statement that starts with revenue and deducts costs and expenses to arrive at net income, the profitability of a company, in a specified period. The P\&L statement—or “Income Statement”—is a financial report that summarizes a particular company’s revenue, costs, and expenses across a stated period. ![Profit and Loss Statement (P\&L)](https://media.wallstreetprep.com/uploads/2022/01/23051833/Profit-and-Loss-Statement-PL-960x507.jpg) ## How to Read a Profit and Loss Statement The profit and loss statement—or “P\&L Statement”—is one of the three core financial statements that publicly traded companies are obligated to file with the SEC. For public companies listed in the U.S., the [10-Q](https://www.wallstreetprep.com/knowledge/10-q-filing/) profit and loss statement (P\&L), often used interchangeably with the term “Income Statement”, must be filed each quarter, with a [10-K](https://www.wallstreetprep.com/knowledge/10-k-filing/) annual filing due for the 4th quarter. - Quarterly Filing (10-Q) ➝ 3x Per Year (and 4th is 10-K) - Annual Filing (10-K) ➝ 1x Per Year Together, alongside the [cash flow statement (CFS)](https://www.wallstreetprep.com/knowledge/cash-flow-statement/) and [balance sheet (B/S)](https://www.wallstreetprep.com/knowledge/balance-sheet/), the P\&L statement provides a detailed depiction of the financial state of a company. In particular, the P\&L statement shows the [operating performance](https://www.wallstreetprep.com/knowledge/ebitda/) of the company as well as the costs and expenses that impact its [profit margins](https://www.wallstreetprep.com/knowledge/profit-margin/). Upon assessing a company’s P\&L statement, one can gauge the company’s ability to: - Generate Revenue ➝ Improve Sales Growth (“Top Line”) - Optimize Operating Structure ➝ Reduce Cost of Goods Sold (COGS) and Operating Costs (SG\&A, R\&D) - Increase Profitability → Higher Gross Margin, Contribution Margin (CM), Operating Profit Margin, EBITDA Margin, and Net Profit Margin ## How to Prepare Profit and Loss Statement (P\&L) The profit and loss statement (P\&L) can be prepared by an accountant under two different methods: - Accrual Accounting (U.S. GAAP) ➝ Under the revenue recognition principle (ASC 606), revenue is recognized when “earned” under GAAP standards (i.e. product or service delivered to the customer regardless of whether [cash](https://www.wallstreetprep.com/knowledge/cash-equivalents/) payment was received). Expenses are matched in the same period as the corresponding revenue they helped create, which is called the matching principle. The income statement filed with the SEC must abide by U.S. GAAP reporting standards. - Cash Basis Accounting ➝ Under cash basis accounting, revenue is not recognized until the customer pays in cash to the company for the products or services received. Expenses under cash accounting, similar to revenue, are not recognized until the cash outflow occurs – meaning that the company has actually paid the third party in cash. The income statement prepared under cash-basis accounting are more common for private companies. ## What is the Format of a P\&L Statement? The standard profit and loss statement (P\&L) format will consist of the following line items: \| Income Statement \| Line Items \| \|---\|---\| \| Net Revenue \| Net Revenue = Gross Revenue – Returns – Discounts – Sales Allowances \| \| Less: Cost of Goods Sold (COGS) \| Cost of Goods Sold (COGS) = Beginning Inventory + Purchases in the Current Period – Ending Inventory \| \| [Gross Profit](https://www.wallstreetprep.com/knowledge/gross-profit/) \| Gross Profit = Revenue – COGS \| \| Less: Operating Expenses (Opex) \| Operating Expenses = Σ SG\&A, R\&D \| \| Operating Income ([EBIT](https://www.wallstreetprep.com/knowledge/ebit/)) \| EBIT = Gross Profit – Operating Expenses \| \| Less: Interest Expense \| Interest Expense = Interest Rate (%) × Debt \| \| Pre-Tax Income (EBT) \| EBT = EBIT – Interest Expense \| \| Less: Income Taxes \| Income Tax = Effective Tax Rate (%) × EBT \| \| [Net Income](https://www.wallstreetprep.com/knowledge/net-income/) \| Net Income = EBT – Taxes \| ## Profit and Loss Statement Example: Alphabet (GOOGL) The profit and loss statement (P\&L) of [Alphabet (GOOGL)](https://abc.xyz/investor/)—derived from financial data platform [Daloopa](https://hubs.ly/Q02t-L550)—is presented below to illustrate the format of an income statement. [![Income Statement Example (P\&L)](https://media.wallstreetprep.com/uploads/2022/01/21224029/Income-Statement-Example-PL-scaled.jpg)](https://hubs.ly/Q02t-L550) Alphabet, Inc. Income Statement Example (Source: [Daloopa](https://hubs.ly/Q02t-L550)) ## Profit and Loss Statement Calculator — Excel Template We’ll now move on to a modeling exercise, which you can access by filling out the form below. ## Profit and Loss Statement Calculation Example Suppose we’re tasked with creating a simple profit and loss statement (P\&L) for a company with the following financial data. - Revenue = \$100 million - COGS = \$40 million - SG\&A = \$20 million - Interest Expense = \$5 million - Tax Rate = 30% Given those assumptions, we can input each figure into our P\&L statement in Excel while ensuring to abide by the industry standard formatting conventions (i.e. the [financial modeling](https://www.wallstreetprep.com/knowledge/financial-modeling/) “best practices”). Therefore, the assumptions will be formatted in blue font to denote that the figure is hard-coded input, whereas the calculation metrics are formatted in black font. Furthermore, each cost and expense is entered as a negative figure to reflect that the line item represents an outflow of cash. The formula for each profit metric on the profit and loss statement (P\&L) is stated in the following list: - Gross Profit = \$100 million – \$40 million = \$60 million - EBIT = \$60 million – \$20 million = \$40 million - Pre-Tax Income (EBT) = \$40 million – \$5 million = \$35 million - Net Income = \$35 million – (\$35 million × 30%) = \$25 million In closing, our hypothetical company’s gross profit, EBIT, and net income are \$60 million, \$40 million, and \$25 million, respectively. [![Profit and Loss Statement Template Example ((P\&L)](https://media.wallstreetprep.com/uploads/2022/01/25232039/Profit-and-Loss-Statement-PL-Example-Template.jpg)](https://media.wallstreetprep.com/uploads/2022/01/25232039/Profit-and-Loss-Statement-PL-Example-Template.jpg) Continue Reading Below ![salesbanner laptop premium cert ](https://media.wallstreetprep.com/wspimage/salesbanner_laptop_premium_cert_900.png) Step-by-Step Online Course ### Everything You Need To Master Financial Modeling Enroll in The Premium Package: Learn Financial Statement Modeling, DCF, M\&A, [LBO](https://www.wallstreetprep.com/knowledge/lbo-modeling-test-example-solutions/) and [Comps](https://www.wallstreetprep.com/knowledge/comparable-company-analysis-comps/). The same training program used at top investment banks. [Enroll Today](https://www.wallstreetprep.com/self-study-programs/premium-package/)
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