What Is a Profit Loss Statement Template?
The profit and loss statement summarizes the revenues and expenses generated by a company over the entire reporting period. It is also known as the income statement, statement of earnings, statement of operations, or statement of income. The profit and loss statement along with the balance sheet and the direct method cash flow statement is one of the three main financial statements used to assess a company’s performance and financial position. The simple profit and loss statement has a basic mathematical formula:
- Income (Revenues Gains) – Expenses = Net profit
If income is more than expenses, the business will have made a profit. Conversely, if expenses are more than income, then there is a loss. A profit and loss statement can be used for identifying high cost items or expenses that were unproductive and made little or no profit. Analyzing the profit and loss statement will enable you to better control expenses. A profit loss statement template can be used to essentially plug in the necessary numbers to complete your statement.
Structure of the Profit and Loss Statement
Regardless of the type of business or industry the profit and loss statement will be essentially the same. The structure of the profit and loss statement with some sample account headings is shown here:
Income Statement for the period ended __/__/__
Income $
Revenues
Sales
Less sales returns
Service revenue
Less discounts given
Net sales revenue Add all revenue figures
Less COGS
Opening stock
Plus purchases made
Less closing stock
Cost of Goods Sold Add all COGS figures
Gross Profit Net sales revenue-COGS
Gains
Gain made on sale of equipment
Loss on sale of equipment
Total income Gross profit Gains
Expenses
Advertising Expense
Rent Expense
Telephone Expense
Administration Expense
Insurance Expense
Interest Expense
Total Expenses Add all expenses
Net Profit
Total revenue Total expenses
A profit loss statement template might be for a year, three years or even five years. If you are unsure how to do a profit and loss statement, the company analysis service we provide can help.
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